THE LICKS

PROJECT FEASIBILITY REPORT ON
(Coffee shop and catering services)

Submitted in partial fulfillment of the requirement for the award of the degree of Bachelor of Business Administration

BY

FANENDRA KUMAR SHARMA (BBA/3546/07)

UNDER THE GUIDANCE OF “Mrs. Sraboni Dutta” Birla institute of technology (Deemed university) Mesra, Ranchi (Kolkata-extension centre)

THE LICKS CERTIFICATE

This is to certify that the project feasibility report entitled
“THE LICKS” is being submitted by

SHUBHODEEP BHATTACHARYA(BBA/3516/07)

In partial fulfillment of the requirements for the award of the degree of Bachelor of Business Administration. This study has been successfully completed under my supervision and guidance.

MRS. SRABONI DUTTA (Faculty Member)

DEPARTMENT OF MANAGEMENT, B.I.T. MESRA
(KOKATA EXTENSION CENTRE)

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CERTIFICATE OF APPROVAL

This is to certify that the project feasibility report entitled
“ THE LICKS ” is

being submitted by

SHUBHODEEP BHATTACHARYA(BBA/3546/07)

As partial fulfillment of the requirements for the award of the degree of Bachelor of Business Administration. This project report has not been submitted to any other University/Institute for the award of any degree.

(Internal Examiner) Examiner)

(External

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ACKNOWLEDGEMENT

It is indeed a moment of great pleasure and satisfaction to take this opportunity to thank all people who have contributed in making our project a rich experience. I would like to profusely thank the coordinator Mr. R.T. Goswami and all faculty member for providing the efficient contribution and resources for completing the project. I would like to extend my sincerest gratitude to our project guide, Mrs. Sraboni Dutta, without her support and innovations; the successful completion of the project would have not seen the glory. Lastly, I want to thank to my parents, who are a constant source of my inspiration for their continued support without which I would not have been what I am today and also a round of applause to all the friends who joined hands together to make this project a successful mission.

SHUBHODEEP BHATTACHARYA (BBA/3516/08)

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CONTENTS
Profile Page Executive Summary
1.1 1.2 1.3 1.4 Introduction Objective Mission Key to Success

1.

2.

3.

Company details
3.1 Company Location and Ownership

3.2 Start-up Summary

4.

Services 4.1 Service Description 4.2 Competitive Comparison

5.

Input and required Equipments

6.

Marketing Summary

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6.1 Market survey 6.2 Market Characteristics 6.3 Pricing Strategy 6.4 Promotion Strategy 6.5 Sales Strategy

7.

Management Summary or Human Resource plan 7.1 Organizational structure 7.2 Salary Structure
7.3 Requirements,

Recruitment and Selection

7.4 Training and development 8. Financial Summary 8.1 Cast of the Project 8.2 Means of the finance 8.3 Trading and Profit & Loss A/c 8.4 Balance Sheet 8.5 Ratio Analysis 8.6 Break Even Analysis

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9. Risk Assessment

10. Conclusion 11. Bibliography 12. Annexure

PROFILE PAGE
This business plan is prepared by Mr. Shubhodeep Bhattacharya, who is quite a motivated youth of this country and want to start his own business. He wants to be a self employed. He is quite aware of today’s business scenario and has ample knowledge about business and its management. He has quite an innovative idea of opening a coffee shop and catering service firm named “THE LICKS” which will deal with

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serving coffee to its various customers of different age groups and provide catering services to the employees of various organizations. The firm will take contracts and order from various individuals and organizations to build their requirement or utilize these services. This company will be situated in NTPC Rihandnagar township which is closer to Varanasi. This business will be a sole-proprietorship business and Mr.Shubhodeep Bhattacharya will be the owner of the business. All expenses and incomes will be taken by the owner himself. The owner is quite confident of his project and its prospects.

INTRODUCTION
A coffeehouse or coffee shop is an establishment which primarily serves prepared coffee or other hot beverages. It shares some of the characteristics of a bar, and some of the characteristics of a restaurant, but it is different from a cafeteria. As the name suggests, coffeehouses focus on providing coffee and tea as well as light snacks. THE LICKS is a coffee shop

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which will provide with every means to provide refreshments to its customers. When a person comes to a coffee shop,he expects to get quick services and refreshment with a peace of mind.So our shop will see to ity that our customers are served with full dedication and courtesy with due respect to quality. THE LICKS will Rihandnagar (UP) available. It will relaxation, peace come to an end. be serving the people of NTPC in the coming year with every facility to be a place where search for of mind and calmness will ultimately

The Licks company deals with serving coffee to its customers and catering to NTPC employees. It is a partnership business registered under the act of 1932; this business will be sole-proprietorship business and Mr.Shubhodeep Bhattacharya will be the owner of the business. SWOT analysis of the project show the project will have good future and it has much opportunity with avoidable threats and limitations. Company has targeted especially to average income group of people to provide its various services. Regarding the catering service company will charge prices at a subsidised rate and employees will be served by just a call from office. Company will use different promotional techniques to promote it like company will advertise in the newspaper, television

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and magazines. Regarding the company’s private dealings or operational related activities company will take the building on monthly rental basis which will cost around 17000 per month and it will be easy for the company. Regarding the human resource the company will employ 40 skilled and unskilled employees and depending upon the company policy the number of worker may be increased or decreased. Regarding the entrepreneurial team this business will be a sole-proprietorship business and Mr.Shubhodeep Bhattacharya will be the owner of the business. All expenses and incomes will be taken by the owner himself.

OBJECTIVES AND SCOPE
To serve people with dedication and courtesy. To provide time. Quality services with due respect to

1. 2.

3.

Providing easy access to the employees of the organisation by providing “just call and get” services.

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4.

To Generate employment opportunities economic benefit to the society.

and

5.

To maintain a healthy society and serve it better.

MISSION
THE LICKS is a business which deals with serving coffee various age groups and catering to organisation.Our main mission is to establish more and more branches in many cities of our country.

KEY TO SUCCESS

After creation providing various services; Marketing services to companies and individuals; Recruitment of skilled and equipped expertise; Dedication and hard work of the founders; Raising productivity and lowering overall costs.



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PROJECT AT A GLANCE

Proposed Activity

: Coffee shop and catering Services

Promoter and Address: Shubhodeep Bhattacharya B-261,NH-3,NTPC Colony Rihand nagar,UP-231223

Location of the Office:

A-21, Mansarovar complex, Near kalyan kendra, Rihand Nagar,

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UP-231223

Telephone Number:

(05446)244488,242579/80

Fax Number

: (05446) 244230

Website

: www.THE LICKS.com

Complain/Service Email: bshubhodeep@yahoo.com

START-UP SUMMARY
Start-up will require approximate a capital of 29, 00,000 of which Rs 19, 00,000 will be provided by the founder and their families. The remaining Rs 10, 00,000 will come as a loan.

Particular Rent Stationery etc

Amount(R s) 15,000 2,000

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Brochures 4,000 Furniture 80,000 Licenses/ Legal 50,000 Vehicle(on lease) 5,40,000 Research and Development 9,000 Advertisement 50,000 Computer 1,00,000 Machinery and equipment 10,00,000 Insurance 20,000 Others 30,000 TOTAL START UP 19,00,000 EXPENSES START-UP ASSETS Cash Required 10,00,000 Other Current Assets Nil Long term Assets Nil TOTAL ASSETS 10,00,000 TOTAL REQUIREMENT 29,00,000 FUNDING Fanendra kumar sharma Other TOTAL INVESTMENT CURRENT LIABILITIES Account payable Current borrowing Other current liabilities Nil Nil 10,00,000 19,00,000 Nil 19,00,000

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Long term liabilities TOTAL LIABILITIES Nil 10,00,000

TOTAL TOTAL TOTAL TOTAL

START UP EXPENSES START UP ASSETS START UP LIABILITIES REQUIREMENT START-UP

19,00,000 10,00,000 10,00,000 29,00,000

SERVICE DESCRIPTION
THE LICKS is a coffee shop which serves coffee to the customers of various age groups and caters to NTPC(Rihand nagar) at the administrative building. A employee can receive 24 hours canteen services on a call. Customers will received standard services from

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us. We believe in quality of service that’s why we will hire skilled cooks and our service men will be receive specialised training.

COMPETITIVE COMPARISION

THE LICKS is not primarily focused on providing just coffee as majority of its competitors. In the coffee division we have many competitors and they provide refreshment services but not services which we will provide and it’s our competitive edge over others. It has following comparative advantages:-

1.

QUICK SERVICE TRAINED EMPLOYEES COST EFFECTIVENESS USE OF BEST QUALITY OF FOOD MATERIALS USED IN PREPARATION. ACCESSIBLE BY ALL TYPES OF CUSTOMERS.

2.
3. 4.

5.

INPUTS AND REQUIREMENTS

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1.1 FURNITURE

1) Chairs 2) Tables
3)

Shelves. 1.2 ELECTRIC APPLIANCES

1) Air conditioning 2) fans 3) Aqua guards 4) Personal computers. 5) Other Equipments Use In Construction
6)

Electrician Equipments(boards,fittings,etc)

1.3 COMMUNICATIONS

1) 2)

Telephones Fax machine

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1.4 SERVICES

1) Catering

1.5 MATERIALS

1)
2) 3) 4)

Various types of food materials Painting equipment. Decorative items. Equipments used in creating an infrastructure. Electrical appliances.

5)

1.6 OTHER

1) 2)

Fire extinguishers Human Resource

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MARKET SURVEY
I have done an innovative market survey of 100 persons of Rihand nagar. For the “ESTABLISHMENT OF THE COFFEE SHOP AND SERVICES” .Survey is entertained by 100 individuals which includes 30 high level income people,40 middle and 30 lower level income people. Out of the 30 high level income groups are from executives of NTPC limited and rest 40 and 30 includes middle level employees,young adults and people in surrounding villages. We have done a successful and informative survey in which we get to know that they would really encourage the

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establishment of a coffee shopand catering services for the convenience of the employees in the township.

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MARKET CHARTERSTICS
TARGET CUSTOMER The targeted customers are NTPC employees categorised executives,officers, sr.managers and customers of various age groups etc. Our target markets are middle to upper class families, private and public organizations.

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GEOGRAPHICAL AREA It is situated in NTPC (Rihand nagar) township area which is rich in its class. COMPETITION & EXISTING MARKET As the idea new of establishing coffee shop along with the catering services,we will try to grasp the market on the basis of our service and professionalism in our approach.

PRICING STRATEGY
Our pricing will be depending on the type of beverage,service and quality. Price of different services is set in such a way that any body can afford the services.

PROMOTION MIX
Following initial promotional activity through advertisement in news papers, magazines, and on

THE LICKS
local Television and radio, THE LICKS will significantly reduce its promotional effort in the hope that word-ofmouth publicity will attract potential clients. THE LICKS will also use the promotional technique by providing various free of cost services.

SALES STRATEGY
Anticipation sales are shown in the accompanying table and chart.

SALES FORECAST
PARTICULAR
Coffee service Catering services Consultancy services(guard )

2011(Rs)
30,000 75,000 13000 1,18,000

2012(Rs)
40,000 85,000 15000 1,40,000

2013(Rs)
60,000 1,20,000 18000 1,98,000

TOTAL

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FINANCIAL PLAN
Financial Analysis is one of the most important aspects of any project. Rather it is the backbone of a project and without continuous supply of funds, an organization can’t prosper and of this very reason it is bound to fail.

Financial management is an integral part of the business administration and ranks equally in importance with other key result areas such as production and marketing. The fundamental objectives of any venture are survival and growth, though it could be other social objectives too. Financial management plays a major role in fulfillment the above and includes functions like analysis and forecasting needs.

Managing working capital, planning structure etc. Financial analysis refers to the process of obtaining relevant economic information about a project in order to establish its financial viability.

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In order to develop adequate financial information this strategy looks at the projected capital cost estimates under including operating cost estimates and revenue estimates. The information collected for this purpose is printed in the form of Performa balance sheet, Profit & loss statement and cash flow statement. Financial analysis deals not only with the financial aspects of a project but also with its operational aspects, whether the project would enable to achieve the objective for which it is undertaking.

The break even analysis is used to explain its operational characteristics. There are various techniques for analysis of financial statement in order to reach conclusion about the financial health, profitability and efficiency of an enterprise and also to compare enterprise with other similar undertakings.

The techniques of ratio analysis are the most important techniques of financial analysis. It helps in comparing the performance of various companies and judge their financial soundness i.e. appraisal of the project, health of enterprise, performance index and index of pitfalls. The objectives of financial analysis are

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to develop the project from financial angle and to identify financial characteristics.

THE MAIN PURPOSE OR OBJECTIVES OF FINANCIAL ANALYSIS


To know the earning capacity or profitability, To know the solvency, financial strength, To make comparative study with other firms, To know the capacity of payment of interest and dividend, To know the trend of the business, to know the efficiency of management, To provide useful information to the management.


 

IMPORTANT ASSUMPTIONS

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There are following assumptions THE LICKS has: • A constantly growing economy without any major recession or boom;

No unpredictable changes in Coffee shop or catering services. No national or global events that threaten the stability and services of the country and citizens.

• Current interest rate (8.92%) will be same for the three years. • Tax rate also be same for the coming three years.

MEANS OF FINANCE
Finance is one of the basic requirements of the project. The entrepreneur needs capital start with and he/she needs Financial Assistance with every steps of the project. As various costs are associated with it, To need the cost of the project following means of finance are available. :-

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Owner’s contribution term loan Reinvestment of profits

1.

2. 3.

Owner’s contribution- Because this is sole proprietorship business my contribution is Rs 6, 00,000.
1.

Working loan (4,00,000)- We would be getting this middle term finance from SBI bijpur branch.
2.

3. Reinvestment of profits – During the substantial years, we will be reinvesting the profits earned.

COST OF THE PROJECT
FIXED COST

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PARTICULARS Expensed equipment Furniture Vehicles (on lease) Computer License AMOUNT 10, 00,000 80,000 5, 40,000 1, 00,000 50,000 TOTAL 17,20,000

VARIABLE COST PARTICULARS Rent Advertisement Insurance Brochures Electricity Telephone Bill Salary(permanent+
temporary)

AMOUNT 1,80,000 50,000 20,00 0 4,000 20,00 0 40,000 40,84,000 20,000 44,18,000

Maintenance TOTAL VARIABLE COST

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TOTAL COST OF THE PROJECT = FIXED COST + VARIABLE COST = 1720000+4418000 = 6138000

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PROFIT AND LOSS STATEMENT OF THE DIVINE FOR THE YEAR ENDED 31ST DECEMBER,2010 Dr.
PARTICULARS AMOUNT (Rs.) PARTICULARS

Cr.
AMOUNT (Rs.)

To purchase 39,00,000 By sales 84,45,000 To Salary 40,84,000 To gross profit 4,61,000 c/d 84,45,000 84,45,000 To insurance 20,000 To telephone 40,000 By gross 4,61,000 charges profit b/d To electricity 20,00 charges 0 To office rent 15,000 To legal 50,000 charges To maintenance 20,000 charges To 50,000 Advertisement To interest on 89,200 loan To broachers 4000

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To net profit 1,52,800 4,61,000 4,61,000

NET PROFIT FORE CAST years 2010 2011 2012 PROFIT 1,52,000 1,82,000 2,02,000

BALANCE SHEET OF THE DIVINE AS ON 31ST DECEMBER 2010

LIABILITIES

AMOUT(R S)

ASSETS

AMOUNT (RS)

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Capital 10,00,000 ADD Net profit 19,00,000 Cash in hand Furnitures 80,000 52,000 19,52,000 Less (dep.@5% p.a) 4,000 76,000 Bank loan 10,00,000 Machinery and ADD equipments 10,00,000 Interest 8.92% 89,200 10,89,200 Less (dep.@6% p.a) 60,000 9,40,000 Vehicles Computer 1,00,000 Less (Dep. @ 1%) 1,000 Investments 30,41,200 5,40,000

99,000 2,94,200 30,41,200

BREAK EVEN ANALYSIS
CONTRIBUTION = SALES –VARIABLE COST 1. =84,45,000 – 44,18,000 = Rs. 40,27,000

2.PROFIT VOLUME RATIO = CONTRIBUTION (P/V RATIO) SALES

100

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100 = Rs. 47.685 % 3. BREAK-EVEN POINT (IN Rupees)=

= = 36070.043
Hence, the break even point in which there is no profit no loss is at 36070.

RATIO ANALYSIS
LIQUIDITY RATIO
1.

CURRENT RATIO =

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=

= 1:1

ideal current ratio=1:1, I maintain a sound current position, the firms has a good short term solvency.

2.

PROPRIETORY RATIO

High Proprietary ratio indicates High Margin for Creditors. in our case it is very high ensures good margin of safety to the creditors but not to the firm. So, we have to look after our proprietary ratio to reduce it, to ensure maximum utilization of funds

LEVERAGE OR SOLVENCY RATIOS

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1. Debt Ratio

= =0.256 The debt ratio of 0.256 means that lenders have financed 25.6% or about onefourth of THE DIVINE net assets(capital employed).it obviously implies that owners have provide the remaining finances. They have financed: 1-0.256 =0.744 =74.4% or about the three fourth of net assets. 2. Debt-Equity Ratio = = = 0.345

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3.

Capital Employed To Net worth Ratio

1.345

TURNOVER RATIOS 1. Capital Turnover Ratio =

=

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The net assets turnover or capital turnover ratio of 2.95 times implies that THE DIVINE is producing Rs. 2.95 for one rupee of capital employed in net assets. 2. Fixed Assets Turnover

= 4.91times 3. Current Assets Turnover

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1.94 times

THE DIVINE turns over its fixed assets faster than current assets. Interpreting the reciprocals of the ratios, one may say that for generating one rupee, the firm needs respectively Rs 0.20 investment in fixed assets and Rs 0.50 investments in current assets . PROFITABILITY RATIOS 1. Gross Profit Margin

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= 0.055 or 5.5% The gross profit margin reflects the efficiency with which management produces each unit of products. The ratio indicated the average spread between the cost of good sold and the sales revenue. When we subtract the gross profit margin from 100 percent, we obtain the ratio of cost of goods sold to sales that is 94.5%. 2. Net Profit Margin

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0.0181 or 1.81%

3. Operating Expense ratio

0.98 or 98%

The operating ratio for THE DIVINE indicates that 98 percent of the sales have been consumed together by the cost of goods sold and other operating expenses.

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4. Return on Investments

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ORGANISATIONAL STRUCTURE
There are two division of THE LICKS: “COFFEE SHOP AND CATERING SERVICES”. With the growth of the company more division will be created as the demand for services increases. We have 40 employees at start including me

1)

Shubhodeep Bhattacharya: CEO and founder of THE DIVINE. Mr.Bhattacharya is responsible for managing, guiding, directing and control activities of the company.

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2)

There are five main chefs who will manage all orders received from customers and employees .

3)

There are 25 permanent workers who will serve in administrative building and we will have shuffling of the workers on a semi-anually basis. THE LICKS have 5 servants who are trained in each and every home service like cleaning, washing, cooking etc. There are list of indirect servants who will be available with us when we contact them.

4)

5)

There are 5 expert electricians and we have a list of many electricians they will be available with us when they require.

6)

THE LICKS also have a list of trained security guards.

7)

THE LICKS will have a list of 30 workers who will be available if there is requirement for more workers.

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THE LICKS will have 2 trainers who will train all employees for their respective jobs. Because THE LICKS will have“call and get” service it will have 2 call operator who will manages calls and take their orders. They will be paid on a daily wages basis.

8)

9)

SALARY STRUCTURE
THE LICKS will have the following salary structure:

DESIGNATION Workers Electrician Servants Call operator

SALARY 15,000 8,000 7,000 4,000

REQUIREMENTS, RECRUITMENT AND SELECTION

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For hiring or recruiting Engineers, expert electrician, call operators, and trainers we give advertisement in the News papers and magazines. We also use some brokers who will bring labour for us. The eligibility criteria for will be mentioned in the advertisements.The electricians must have a graduate degree (ITI people will prefer) and must be experienced one. The call operators and Receptionist must be 12th pass and has a good communication skill especially in Hindi, English . Other employees work& experience will matter rather than graduation. All employees have the ability and desire to work will be hire for jobs.

TRAINING AND DEVELOPMENT
We will have two trainers who are expert in training employees. They trained employees how to perform their work effectively and efficiently. We also periodically organize some training programmes for workers so they aware about new ideas design and way of doing works.

RISK ASSESMENT

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Thought the plan is very concrete and SWOT analysis has been done but still there are few risks which can act as hindrance during the commencement of the business. They have been noted down as follows: Refutation of loan from bank can cause a big risk before commencement. It is a new company so it might be at risk that whether the business will take off properly or not. Due to limited amount of capital at initial stage may cause a situation of shortage of capital The company is in the business of apparel and is susceptible to continuous change in the tastes and preferences of the consumer. Thus, it has to keep abreast of the rapid change in the buying habits and latest service trends. Loan asked from bank is also limited.

The company might face the stringent Government policy due to which the plan may face difficulty in implementation of it. Thus in short the company might face risk during the initial period but once it get properly established the company may not fall under any above –mentioned circumstances until and unless it flourishes.

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CONCLUSION
From the questionnaire survey the future of THE LICKS firms looks great. Though there are some obstacles and risks but they can be crossed with hard work and experience. According to survey the people of Rihand nagar really needs a shop and service which will provide these types of services especially in just call and get. Among the coffee shops there are very companies running successfully. But we have some quality which makes us differ from others. One of the greatest barriers in service would be the individual local servants, driver, electrician and plumbers, but we are providing experienced people and just call and get with same cost. Though there are these types of competitors in services and other competitor’s in house construction it would be a challenge for THE DIVINE to get most of the contracts and raise its goodwill to occupy the leading position in the market. it will never forget the basic values and ethics of business. “THIS IS OUR MOTTO” LET’S HOPE FOR THE BEST!!!!

COMPANY LAYOUT

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FANENDRA SHARMA’S OFFICE (CEO) TRAINER OFFICE AND TRAINING ROOM

ARCHITECH ENGINEER

ARCHITECH ENGINEER

CALL OPERATOR

CALL OPERATOR

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SOURCES

RECEPTION

OF INFORMATION
PRIMARY DATA:-

Information collected through questionnaires

SECONDARY DATA:From Newspapers like;The Telegraph Economics Times

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Prabhat Khabar From magazines like:Business World Business week Outlook

QUESTIONNAIRE
NAME AGE OCCUPATION INCOME : : : :

Q.1 Are the home construction company are serving your purpose? 1) YES 2) NO

Q.2 Do you have any servant? 1) YES 2) NO

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Q.3 Do you require painter, plumber, electrician, house cleaner? 1) YES 2) NO

Q.4 Are the home services (servant, painter, cleaner, plumber, electrician) are serving your purpose? 1) YES 2) NO

Q.5 IS house construction and home service provider are requiring in Raipur? 1) YES 2) NO

Q.6 Do you face any problem or difficulties in contact or searching those people who give home services? 1) YES 2) NO

Q.7 level of difficulty: 1) low 2) high 2) moderate 4) very high

Q.8 usually how much time it takes to search for those services? 1) Within 2 hours 2) between 3 to 7 hours 4) more than it

3) Between 8 to 12 hours

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Q.9 do you want that these service are available to at a call ? 1) YES 2) NO

Q.10 IF a firm organizes for you house construction and home services would you be interested? 1) YES 2) NO

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