CONTENTS

Sl No Topic
1 Introduction
2 History
3 Reason for candle making business
4 License and Registration Required
5 Business Profile
6 Vision and Mission
7 Swot Analysis
8 Market Potential
9 Products
10 Raw Materials required
11 Installed capacity
12 Manufacturing process
13 Requirement of plant and machinery
14 Location
15 Variable cost
16 Human Resource Planning
17 Market planning
18 Financial planning
19 Exit strategy
20 Conclusion
 1) Introduction
People lighten candle not only for religious purpose but
also as a decor item. Apart from the traditional long white candle,
there is also a very potential market for scented and decorative
candles.

2) History
Candles have been used for light and to illuminate
man's celebrations for more than 5,000 years, yet little
is known about their origin It is often written that the
first candles were developed by the Ancient Egyptians,
who used rush lights or torches made by soaking the
pithy core of reeds in melted animal fat. However, the
rush lights had no wick like a true candle. The
Egyptians were using wicked candles in 3,000 B.C.,
but the ancient Romans are generally credited with
developing the wicked candle before that time by
dipping rolled papyrus repeatedly in melted tallow or
beeswax
Historians have found evidence that many other
early civilizations developed wicked candles using
waxes made from available plants and insects. Chinese
candles are said to have been moulded in paper tubes,
using rolled rice paper for the wick, and wax from an
indigenous insect that was combined with seeds. In
Japan, candles were made of wax extracted from tree
nuts. In India, candle wax was made by boiling the
fruit of the cinnamon tree. Candles have come a long
way since their initial use. Although no longer man's
major source of light, they continue to grow in
popularity and use.
Today, candles symbolize celebration, mark
romance, soothe the senses, define ceremony, and
accent home decors — casting a warm and lovely glow
for all to enjoy

3) Reason for Candle Making Business

Candle making is one of the most popular businesses
for beginners as it is very easy to start. Broadly this is
because of the following reasons.
Firstly, the investment required to start this business
is much less.
Secondly, the process of manufacturing the item is
simple. We do not require much machinery to
manufacture candles. We need only wax and wick to
start this business which is readily available in the
market.
Thirdly, the demand for candles is there throughout
the year.
 4) License and Registration Required
Initially, we are planning to run a candle making business
from home, a trade license from local authority will be
enough to start with.
However, later when we are planning to start a
commercial candle manufacturing, we need to consider
the following.
We need to register our business. We can form a LLP or
Pvt Ltd. company as per our requirement. Apply for our
business Pan Card. Obtain Trade License from our local
authority.
In addition, open a current Bank Account. We can also
apply for a loan for machinery and working capital. We
can register your business as SSI Unit also. Apply for
Sales Tax Registration. We can also protect your brand
name by registering Trade Mark.

5) Business Profile
Name of company Candle
Type of company Partnership
Type of business Candle manufacturing
Area of operation Wonder CandleS
Category Small scale
Phone number 9845100108
e-mail id candlewonders@gmail.com
 6) VISION AND MISSION
VISION:-
To enlighten the each and every family.

MISSION:-
To become a dominant player in the chosen field

Evolve and upgrade knowledge, products, and services

7) SWOT ANALYSIS
Strengths
 Availability of Low Cost and Skilled Manpower
provides competitive. Advantage
 Growing Economy and Potential Domestic.
Weakness
 Competition with others candle manufacturing
Opportunities
 Large Market.
Threats
 Now days many are not going to buy and give more
important to the candle.
 8) Market Potential
 Presently, the demand for aromatic and decorative
candles is on the rise. These candles are being
used by many households, restaurants, event
parties in brightening up their interior.
 Mainly two types of candles that we can produce.
One is a white color simple long candle with
different height and size.
 Another category is decorative candles like colorful,
scented, spiral, birthday type, tapered, spiral,
fluted, LED, pillar candles
1. End product :-Coloured scented candles, long and
thick candles
2. End users :- Low, Middle & upper class,
Decorators
3. Suitability and strength of selecting particular
product :- Innovative, there are not many players
4. Product life cycle and present status :
Introduction Stage
5. Past demand pattern: High
6. Anticipated future demand : Higher
7. Buying criteria and influencing factors: Value
for money pricing will influence customers

9) Products

Scented Candle
Long thin candles
Long Thick candles
Spiral candles
Glass candles
Colour candles
Design Candles

10) Raw Material Required

1. Paraffin wax
2. Wick
3. Different colours
4. Scents and fragrance
5. Sustained base

11) Installed Capacity

No. of working days – 360 days (30 days as contingency)
No. of working hours – 8 hours (2 hrs idle)
No of machines – 2 (rs5 and rs 2)
Moulds of different size
Birthday candles mould – 2

12) Process of Candle

Manufacturing

 1st the wax is been heated and the wax is

been converted into liquid.
 That liquid to filled into moulds machine
  For cooling which will convert liquid into solid
form.
 And remove the solid candles out of machine
 Later, the packing process is started

13) Requirement of plant and

machinery
TABLE 1

Sl Machine Rate Qty Capacity Total

no

1 Candle making (rs 2) 70,000 1 1,000candles/20min 70,000

2 Candle making (rs 5) 50,000 1 200candles/20min 50,000
3 Heater machine 15,000 1 25 kg/10min 15,000
4 Design mould 5,000 20 - 10,000
Total 1,45,000

265(180+85) kg of candles per day is produced

Out of which 18 trips of machine 1 and 17 trips of
machine 2
Machine 1: Produces Rs 2 candles and each candle weigh 10g
Total 180kg per day
Machine 2: Produces Rs 5 candles and each candle weigh 25g
Total 85kg per day
 14) Location
Area: Kote road, Shimoga
Size : 25*25 (6,250 sq ft)
Type : Rented
Advance : Rs.72,000
Rent : Rs. 6,000 p m

15) Variable cost

Table 2

Item Rate
.
Paraffin wax Rs 60/kg
Wick Rs 300/kg
Electricity Rs 150/hr
Labour Rs 500/day
Rs 2/kg
 16) Human Resource Planning
Table 3

Position Wage/day No. required Total

Salary/month
Labour 500 2 2,000
Manager 30,000 1 30,000
Selling manager 30,000 2 60,000
Packing manager 30,000 2 60,000
Accounting manager 30,000 1 30,000

Role of HR

Manager:
 Performs supervisory roles over other heads of departments and also
works hand in hand with them to ensure that the operations in the
company runs smoothly
 The Manager is responsible for ensuring that feedbacks are gotten from
the staff
 Helps to translates the vision and mission statement of the company to
the staff so that everyone are aware of what is needed to be done
 Helps resolves conflicts, as well as motivate employees

Sales Manager:
 Responsible for creating strategies that will address the need of target
segments
 Responsible for drafting an effective marketing plan, which would
cover promotion and the right pricing
 Works with manager to ensure that the sales and marketing strategies
meet with the overall strategies of the company
 Ensures that the company’s image is projected positively in the course
of meeting target market requirements
  Interacts with customers and pass feedbacks back to the appropriate
department

Packing manager:
 Selecting good package for packing
 Responsible for proper packing
 Labelling the product

Accounting manager:
 Maintains the books of account
 Enter day to day transactions
 Fixes cost
 Provide fund to all other department

Labour:
 Responsible for creating and introducing new varieties of candles into
the market
 Works closely with fragrance and coloring manager to identify
marketable varieties
 Responsible for cleaning and maintaining the facilities in the company

17) MARKETING PLAN

Target Market
In India problem of electricity is known as one of the big
problem mainly we concentrating on villages 1,80,000
villages are there in India and using candles rural people are
our target as well as urban people this problem is all over in
country and also for decoration centre and churches

Marketing Mix
Product
Features good quality with low price.
Price
Reasonable Price
Promotion
1. Our product is promoted through:
2. Advertisements in local news paper.
3. Bill boards and hoardings.
Place
1. Local shops
2. rural area (village)
3. Decorates and parties
4. Church

18) Financial plan

Fixed cost
Table 4

Sl no Item Value/ Rs
1 Machinery (Table 1) 1,45,000
2 Building (location, advance) 72,000
Total 2,17,000

Variable Cost
Table 5
Sl no Item Rs/kg candle Total/ month
(265kg/day) (25 days)
1 Wax 60 3,97,500
2 Wick 10 66,250
3 Electricity 2 13,250
4 Labour (2) 4 26,500
5 Packaging 0.5+1 9,938
6 Transportation 3 19,875
Total 80.50 5,33,313
Capital invested
6 partners – Rs 1,35,000 each
Total investment – Rs 8,10,000
Fixed assest investment – 2,17,000
[One month Variable cost – 5,33,313
6 months rent – 36,000
Cash in hand – 23,687]
(partnership deed has been enclosed)

Contingency expenses and stock remaining

Table 6

Days Kg produced Amount (Rs)

360 95,400 1,04,94,000
-30 days 7,950 (8,74,500)
(contingency)
-30 days 7,950 (8,74,500)
(remaining
stock)
300 days (Sold) 79,500 87,45,000
Cost Sheet for 1st year (87,450kg
produced units)
Table 7

Particulars Amount Amount

Raw materials
Wax (60*87450) 52,47,000
Wick (87,450*10) 8,74,500 61,21,500
Direct expense
Electricity (1.2*87450) 1,04,940
Labour (87,450* 4) 3,49,800
PRIME COST 65,76,240
Add: Indirect cost
Salary (6*12*30,000) 21,60,000
Packing (1.5*87,450) 1,31,175
Cost of manufacturing 88,67,415
Add: Selling expenses
Advertisement 50,000
Transportation (3*79,500) 2,38,500
Total cost 91,55,915
- Value of closing stock 6,16,125
(7,950*77.5)
- Sales (110*79,500) 87,45,000
PROFIT 2,05,210

Calculation of Contribution
Particulars Rs/kg Rs / year
Sales 110 87,45,000
- Variable cost ( table 5) (80.50) (63,99,750)
Contribution 29.50 23,45,250
 Fixed cost (table 4) - 2,17,000
Rent (6000*12) - 72,000

Calculation of Break even point (BEP)

Profit volume ratio = (Contribution/ Sales)*100

= (23,45,250/87,45,000)* 100
= 26.81%

BEP (in Rs) = Fixed cost / PV ratio

= (2,89,000/ 26.81) * 100
= Rs 10,77,955.98

BEP (in units) = BEP in Rs/ Selling price per kg

= 10,77,955.98/ 110
= 9,800 kg

Estimated trading and Profit and loss

account for 1st year

Particulars Rs Particulars Rs
To purchases 61,21,500 By sales 87,45,000
To manufacturing 1,04,940 By c/s stock 6,16,125
exp
To wages 3,49,800
To gross profit 27,84,885
93,61,125 93,61,125
To packing exp 1,31,175 By Gross 27,84,885
profit
To transportation 2,38,500
exp
To salary 21,60,000
To advertisement 50,000
To rent 72,000
To depreciation 7,250
To net profit 1,25,960
27,84,885 27,84,885

Cashflow statement of 1st year

Source Amount Application Amount

Capital invested 8,10,000 Machinery 1,45,000
Sales in cash 87,45,000 Advance rent 72,000
Rent of year 72,000
Salary 21,60,000
Raw materials 61,21,500
Electricity 1,04,940
Wages 3,49,800
Packing 1,31,175
Transportation 2,38,500
Advertisement 50,000
Cash in hand 50,085
Cash at bank 60,000
95,55,000 95,55,000
 Estimated Balancesheet of 1st year ending

Liabilities Amount Assets Amount

Capital 8,10,000 Machinery 1,37,750
[1,45,000-(5% of dep)]

(+) Net profit 1,25,960 Advance payment 72,000

of rent
Cash in hand 50,085
Cash at bank 60,000
Closing stock 616125

9,35,960 9,35,960

Calculation of ROI 1st year

Return on investment = (Net profit/

Total investment)*100
=(1,256,960/8,10,000)*100

= 15.55%

Cost sheet for 2nd year

Particulars Amount Amount

Raw materials
Wax (60*87450) 52,47,000
Wick (87,450*10) 8,74,500 61,21,500
Direct expense
Electricity (1.2*87450) 1,04,940
Labour (87,450* 4) 3,49,800
PRIME COST 65,76,240
 Add: Indirect cost
Salary (6*12*30,000) 21,60,000
Packing (1.5*87,450) 1,31,175
Cost of manufacturing 88,67,415
Add: Selling expenses
Advertisement 50,000
Transportation (3*90,000) 2,70,000
Total cost 91,87,415
Add: Value of opening stock 6,16,125
(7,950*77.5)
Less: value of closing stock (4,18,500)
(5,400*77.5)
- Sales (110*90,000) 99,00,000
PROFIT 5,14,960

Estimated trading and Profit and loss

account for 2nd year

Particulars Rs Particulars Rs
To opening stock 6,16,125 By sales 99,00,000
To purchases 61,21,500 By c/s stock 4,18,500
To manufacturing 1,04,940
exp
To wages 3,49,800
To gross profit 31,26,135
1,03,18,500 1,03,18,500
To packing exp 1,31,175 By Gross 31,26,135
profit
To transportation 2,70,000
exp
To advertisement 50,000
To salary 21,60,000
To rent 72,000
To depreciation 7,250
 To net profit 4,35,710
31,26,135 31,26,135

Cashflow statement of 2nd year

Source Amount Application Amount

o/p cash in 50,085 Rent of year 72,000
hand
o/p cash at 60,000 Salary 21,60,000
bank
Cash sales 99,00,000 Raw materials 61,21,500
Electricity 1,04,940
Wages 3,49,800
Packing 1,31,175
Transportation 2,70,000
Advertisement 50,000
Cash in hand 2,50,670
Cash at bank 5,00,000

1,00,10,085 1,00,10,085

Estimated Balancesheet of 2nd year ending

Liabilities Amount Assets Amount

Capital 8,10,000 Machinery 1,30,500
(1,37,750-7,250)
[1,45,000(5% of dep)]
(+) Net profit 4,35,710 Advance payment 72,000
of rent
(+) reserve 1,25,960 Cash in hand 2,50,670
Cash at bank 5,00,000
Closing stock 4,18,500

13,71,670 13,71,670
Calculation of ROI 2nd year

Return on investment = (Net profit/

Total investment)*100
=(4,35,710/8,10,000)*100
= 53.79%

Cost sheet for 3rd year

Particulars Amount Amount

Raw materials
Wax (60*87450) 52,47,000
Wick (87,450*10) 8,74,500 61,21,500
Direct expense
Electricity (1.2*87450) 1,04,940
Labour (87,450* 4) 3,49,800
PRIME COST 65,76,240
Add: Indirect cost
Salary (6*12*30,000) 21,60,000
Packing (1.5*87,450) 1,31,175
Cost of manufacturing 88,67,415
Add: Selling expenses
Advertisement 1,00,000
Transportation (3*91,000) 2,73,000
Total cost 92,40,415
Add: Value of opening stock 4,18,500
(5,400*77.5)
Less: value of closing stock (1,43,375)
(1,850*77.5)
- Sales (110*91,000) 1,00,10,000
PROFIT 4,94,460
 Estimated trading and Profit and loss
account for 3rd year

Particulars Rs Particulars Rs
To opening stock 4,18,500 By sales 1,00,10,000
To purchases 61,21,500 By c/s stock 1,43,375
To manufacturing 1,04,940
exp
To wages 3,49,800
To gross profit 31,58,635
1,01,53,375 1,01,53,375
To packing exp 1,31,175 By Gross 31,58,635
profit
To transportation 2,73,000
exp
To advertisement 1,00,000
To salary 21,60,000
To rent 72,000
To depreciation 7,250
To net profit 4,15,210
31,58,635 31,58,635

Cashflow statement of 3rd year

Source Amount Application Amount

o/p cash in 2,50,670 Rent of year 72,000
hand
o/p cash at 5,00,000 Salary 21,60,000
bank
Cash sales 1,00,10,000 Raw materials 61,21,500
Electricity 1,04,940
Wages 3,49,800
 Packing 1,31,175
Transportation 2,73,000
Advertisement 50,000
Cash in hand 4,98,255
Cash at bank 10,00,000

1,07,60,670 1,07,60,670

Estimated Balancesheet of 3rd year ending

Liabilities Amount Assets Amount

Capital 8,10,000 Machinery 1,23,250
(1,30,500-7,250)
[1,45,000(5% of dep)]
(+) Net profit 4,15,210 Advance payment 72,000
of rent
(+) reserve 4,68,295 Cash in hand 4,98,255
Cash at bank 10,00,000
Closing stock 1,43,375

16,93,505 16,93,505

Calculation of ROI 3rd year

Return on investment = (Net profit/

Total investment)*100
=(4,15,210/8,10,000)*100

= 51.26%
Calculation of Payback period (pbp)

Cost of machinery = 1,45,000 (c)

Year Annual inflow Cost

1
2
1,25,960(a)
4,35,710 (b)
} between is the
cost i,e1,45,000
3 4,15,210

(a) 1,25,960
(b) 4,35,710
(c) 1,45,000
Pbp = (b)-(a) / (b)-(c)
= (43,5710-1,25,960)
/ (43,5710-1,45,000)
= (3,09,750/ 2,90,710)
= 1.065 years
i,e. 1 year 23 days
19) Exit Strategy

If at all, by any chance the firm need to wind up

because of loss or dispute between the partners
or due to any other reasons, then any of the
following strategy can be used to wind up the
firm:
 Transfer of firm to any willing partner who
wants to continue at the market price of
firm
 Sell the firm to any outsider who is
interested to continue the firm at best price
 Sell the machinery and left stock to the
person who is already carrying the same
business at reasonable price
 Sell the machinery as a second hand at
depreciated value
 Let the firm be merged with any of well
going business
 If, it is wish of all partners will restructure
the partnership deed and continue firm in
different way
 If, it is wish of all partners will restructure
the partnership deed and will start any
other new business by the money got by
sale from above method

Sharing of the amount by way of exit

strategy/ strategies among partners
will be equal
20) Conclusion
As the firm will be growing and getting
increased profit year by year and also Return on
Investment (ROI) will be achieved in 3 years , it
is best to expand the firm.
That can be done by further investing on
machinery and space to work by
 The profit earned in past years
 Making use of reserves
 Further introduction of capital by partners
 PARTNERSHIP DEED (virtual)

Name of partners : 1 Ashika A Jain

2 Bhoomika J G
3 Chaitra M
4 Chaita M I
5 Chethan Kumar
6 Chethan R K
Name of firm: Wonder Candles
Type of firm: Manufacturing Unit with sales
Location of firm: Ashoka Road, Shimoga
Capital invested by each partner: Rs. 1,35,000
{total investment of firm be Rs.8,10,000}

Rules
1) Profit and loss of firm will be equally shared among the
partners
2) All partners are working partners and have their
responsibility which they need to fulfil
3) Partners will get salary of Rs.30,000 per month
4) No interest will be provide on capital invested
5) Interest of 12% per month will be availed for drawing of
amount
6) New entry of partner is not allowed till any exit of partner
among existing
7) Exit of partner will get back his capital amount only after
when new partner joins in the firm as a partner
8) And exit partner will get the profit it the date of his leave
9) If the firm is winding up then the capital invested will be
returned back only after all the due payments are cleared
10) If any due payment left during winding up then partners
should bring amount equally to due payment, if firm have
no amount left to pay

Date: Signature: 1) 4)
2) 5)
3) 6)