Financial Analysis of Tea Shop Owner

Abstract
A tea stall is a tiny shop where tea is prepared and served. It is seen on the roadside, in markets,
stations, terminals etc. It is very familiar place for the people of Bangladesh. In this report we
will describe the financial analysis of the tea stall/shop owner. We choose a popular tea shop
which is popular in Dhaka city. The shop name is “Farider Lal Cha”. His has only one small
tea shop and this is the only source of income of the shop owner. We are so interested to analysis
his financial analysis and how he run his business. In this report we are going to describe the
mission, vision, SWOT analysis, income statement, balance sheet, cash flows, break even
analysis, business strategy, operational plan etc.
Introduction

Farider Lal Cha is established to become a daily necessity for local tea addicts, a place to
dream of as you try to escape the daily stresses of life and just a comfortable place to meet your
friends or to read a book, all in one. With the growing demand for high-quality tea drinks and
great service. This Tea shop is offer its customers the best prepared tea drinks in the area, as well
as free newspapers that its patrons can read to enjoy their visit. The Farider Lal Cha shop opens
at 7:00 am and its close at mid night.

Location of the shop

This shop is situated in near to the Hatir Jheel in Rampura, Dhaka. The shop is operate a 300
square feet area. The shop owners have secured this location through a three-year lease with an
option for extending. This location is to be an effective location because this is a tourist spot
where many people are going to visit every day. The location is also near other business
establishments.

Vision

His vision is to help create the best tasting teas that marked as one of the shops highly reputable
marked as one of the shop’s highly reputable market that could attract visitors within the region
as well as from other places.

Mission

His mission is to provide the finest tea drinks and excellent customer services.

Start-up Summary

Funding for the tea stall comes from two major sources- owner’s investments and bank loans.
Owners have contributed 100000 taka. The remaining 32000 taka needed to cover the start-up
expenses and assets came from the Somobay Somiti as a long-term loan. The start-up
requirements was included short term and long term assets. The following equipment was needed
for the startup of the company:

 Table.
  Chair.
 Assorted buckets, bags, bin.
 Stove.
 Plates, glasses, Cups and Tea pots.
 Water filter.
 Tea raw materials.
 Kettle.
 Soot-blackened.
 Round saucepan.
 Lighter.
 Transparent jar.
 Hydro Flask.

140,000

120,000

100,000

Expenses
80,000
Assets
Investment
60,000 Loans
Owner's Capital
40,000

20,000

0
Start-up

Types of Product
Farider Lal Cha is popular because he offer his customers the best tasting tea drinks in the area
by using high-quality ingredients and strictly following preparation guidelines. This shop has 6
basic types of tea. These are Lal Cha, black tea, oolong tea, green tea, white tea and herbal tea.
Also, he stock a variety of biscuits, bananas, potato chips, chocolates, mints and cigarettes.

Start-up Financials

Start-up Assets Taka Taka

Short-term assets:
Raw materials 2,000
Total Short-term assets 2000
Long-term assets:
Table 10,000
Chair 15,000
Assorted buckets, bags, bin 1,600
Stove 5,000
Plates, glasses, Cups and Tea pots 5,000
Water filter 4,200
Kettle 1,500
Soot-blackened 3,000
Round saucepan 1,500
Lighter 200
Transparent jar 1,000
Hydro Flask 5 pcs 10,000
Total long-term assets 58,000
Total Start-up Long term and Short term Assets 60,000
Start-up Expense
Licenses and Permits 10,000
Leasehold improvement 50,000
Shop installment 10,000
Unanticipated expenses 2,000
Total Start-up expense 72,000

Product price

The following chart is the price strategy for Farider Lal Cha products. He makes his selling
price based on his cost. Lal Cha, black tea, oolong tea, green tea, white tea and herbal tea.

Name of Product Material cost per cup in Taka Selling Price in Taka
Lal Cha 2.5 5
Black tea 10 15
 Oolong tea 10 15
Green tea 15 20
White tea 5 10
Herbal tea 12 20

Start-up Inventory

The table below shows that inventory situation of the Farider Lal Cha Shop, that inventory will
support the Farider Lal Cha to work more than 1 month even without the refill of raw materials.
Product Price Unit/Kg Total Taka
Flavor 100 80lbs 200
Black tea 5 50lbs 250
Green tea 10 50lbs 500
Oolong tea 3 100lbs 300
Milk 70 10 Kg 700
Herbal tea ingredients 50 1 Kg 50
Total 2000