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The partial fulfillment of degree course Masters of Business Administration (MBA) A Business Plan
Project Guide- Dr. Sanjay Medhavi
Submitted to: Dr. Sanjay Medhavi (Dept. of business Admn)
Submitted by:Atul Kumar Roll no. 901113017 MBA( E-Business)
Department of Business Administration Lucknow University Lucknow
I hereby take of Business Administration, Lucknow University, for her guidance the opportunity to express my profound sense of great reverence, awe and gratitude to all of them who have helped me in the successful completion of this desertion project. I wish to express my sincere gratitude to Mr. Sanjay Medhavi, and his support rendered to me in solving my problems and difficulties that I faced in completing this task on such a varied and vast subject. I will be failing in my duty, if I do not acknowledge my heartfelt thanks to Dr. J.K. Sharma (H.O.D) and all the teaching faculty of Department of Business Administration, Lucknow University, for their esteem guidance and support rendered to me. Last but not the least I take this opportunity to express my heartfelt appreciation for my colleagues for their support and encouragement.
The proposed company plans to establish a project for baking the flavored breads in different and unique shapes and sizes. Every bakery offers the bread, which is milky or simple, or diet in only one usual flavor. No bakery offers the flavored breads so far. This company’s main concern is the baking of that bread. This company will helps in enjoying the people the different flavors in different shapes. All the relevant data has been collected from the bakeries and the market. Its baking process is almost identical to the baking process of the simple bread. There’s no problem in getting the required equipment as well as the material as it is all locally available. The company “gud Bread” is the first company concerning with the manufacturing of the flavored bread. It is the company, which don't only deals with the different flavors of bread but also the shapes of the bread. We are a full service providing bread bakers offering a wide variety of fresh breads, which have unique flavors and shapes. We have that new world style taste and freshness that is all but obsolete in today's society.
Nature of business
This business is owned by single owner. Nature of business of The Bread Bakers is to carry out the breads such as: Flavored breads and multi –shaped bread.
To provide our customers with bread that actually looks and tastes good.
The building of a community within the baking industry who voluntarily come together to meet common need and accomplish common goals.
Keys to Success:
• Providing best quality product • Competitive Pricing • Providing unique and innovative product
gud bread pvt. Limited company is owned by single owner . To run this organization successfully I need to have various department and well qualified managers to run each of the department .this company includes various department which are given below • Production Department • Purchasing Department • Finance & Accounts Department • Marketing Department
Gud bread start-up costs will include all the equipment needed for the office, machinery required to manufacture breads , the construction of the factory and all the necessary equipment, and other essentials for making bread.
Manufacturing unit Location and company profile
Name: Gud Bread Location: Ismailganj , chinat road , Lucknow Status: Private Limited Company Working days: 365 Production capacity: 20000(approx.)-breads Our manufacturing unit is located in Ismailganj ,chinhat road, lucknow. We have selected this place because land is cheaply available here, there are economical rent charges and we have our own transportation facility so this is very feasible for us.
We procure our Raw material from that is flour , milk and eggs etc from open market in bulk whick makes it coast effective as we get some discount from open market . Following are the main raw material for the proposed project: • Flour • Yeast • Flavors • Milk • Eggs etc. The entire raw material is locally available in abundance. There is no problem in collecting the raw material from the local sources.
Characteristics of the project
The project, which is being initiated in response to the market demand, will produce quality breads according to the customer’s needs. The product will be a new product in the market. Presently there is no such brand, which produces such flavored breads in unique shapes. The existing bakeries are producing the simple breads but this unit will initiate a new trend in the market. These items have a main emphasis on the morning time when the breads are mostly utilized. It is basically for those persons who are taste conscious and look for some thing new for their breakfast. This item will be distributed to all the exiting bakeries where a separate shelve will be placed.
Bread is easily available in every bakery. As we are offering different flavors of bread so we have decided that our distribution channels will be all existing bakeries like yellow bakery, good bakery, Asim bakery, al-Meraj bakery, etc and most of the departmental stores of Gomti Nagar , Indira Nagar nishatganj, alambagh etc. We try to cover most of the stores of lucknow .We choose these distribution channels because these bakeries already have a large number of customers they daily visit these bakeries & when they will see our product over there they would surely like to have these flavored bread, and each departmental stores also have fixed number of regular customer so the reason of choosing these bakeries and departmental stores is that we are new in the market & we have no customer orientation. That’s why our distribution sourcesare all these existing bakeries.
Although my some competitors sell their bread in all across the country and some cover most of the area of Lucknow. fruit nut etc and in different shapes to provide consumer something new and better product. Provide unique and new kind of bread with high quality standards. Gomti bread purchase high quality raw materials such as eggs . Leading competitors such as Britannia bread . competitors like Britannia and gomti bread make fresh and high quality bread and they have very effective distribution network too. Our main focus is that to differentiate our product from the product offers by other competitors. flavor . and we initially focus on the some selected area of Lucknow. MANAGEMENT’S ABILITY TO DELIVER THE PLAN To extend the plan in the good manner we have a charted accountant which deals with all kind of special financial decisions. marketing promotions and all managements. So because of our new product we have to create our own market my communicating the uniqueness and the quality of the product. We have different department in our bakery which makes control over each and every activity of bakery. flour . Production department head has responsible for production of breads.Competition and Buying Patterns Competition in the local area is very competence and does not provide this innovative kind of bread in different flavor and size. classy experience. They desire a unique. But our main focus is to sell bread in unique flavor such as chocolate. financial head is responsible for daily financial matters of bakery and marketing head deals with all kind of selling and purchasing . milk etc in abundance they have large amount of market share. Local customers are looking for a unique and new high quality bread. Their main competitive advantage is their high quality bread and their brand image. they also have very effective distribution network. Page no: 6 .
Product Profile: Main Products As all the other existing bakeries are providing the three main types of bread so with the flavored breads our main emphasis will be on the same three breads which includes: • Milky bread • Simple bread • Diet bread These introduced flavors are available in each bakery. Bread flavors Our bread flavors along with our brands include the following flavors • Chocolate flavored bread by Bread Bakers • Strawberry flavored bread by Bread Bakers • Vanilla flavored bread by Bread Bakers • Mango flavored bread by Bread Bakers • Pineapple flavored bread by Bread Bakers • Banana Chip flavored bread by Bread Bakers • Fruit Nut Breads by Bread Bakers • Butter Top Bread by Bread Bakers • Cheese flavored bread by Bread Bakers • Garlic flavored bread by Bread Bakers • Ginger flavored bread by Bread Bakers Page no: 7 .
Page no: 8 . So it considers as a continues process because it has made daily demand for production and also consist as a daily meal for society. The Bread Baker’s is the first who consider this need first and now introducing the corner less bread first time in the area.Bread shapes Our bread is not only concern with the flavors but also with the shapes of the bread. We are following the continues process for production here due to fulfill the demand on the daily basis. Stuffed bread is a product in which different material will be stuffed according to the choice of our customers. Our specialty is in corner less bread in different sizes as well as flavors. It is new and different concept. PRODUCTION PROCESS: CAPACITY IN VIEW OF DEMAND TECHNOLOGY We are in business of bread production organization. The way that businesses create products and services is known as the production process. and there are different shapes which includes : • Oval • Round • Square • Triangle • Rectangle • Long-shaped • Cone-shaped Specialty Most of the people don’t like corners of the bread. The Bread Baker’s are panning to launch a new product…The Stuffed Bread. Future Integration In future we.
EQUIPMENT AND MACHINERY Our product line includes • • • • • • • • • • Bakery Machinery Bakery Oven Biscuit Making Machinery Bread Slicing Machine Food Processing Equipment Food Processing Mixers. Oil Dryer Rotatary Rack Ovens High Reliablity Rotatory Rack Ovens Oil-Gas Heated Deck Oven Electric Deck Oven Page no: 9 .There are three main parts to the production process as can be seen in the diagram below: FACILITIES.
We have to check the bread at the time of baking to packaging and check the each and every single unit of bread. It is not done with census because we are in the business of daily meal so we have to check all the units of the breads. Page no: 10 .Our infrastructure is equipped with following machines: • • • • • • • Tig welding machine Sheet bending machine Welding machine Drilling machine Grinding machine Sheet cutting machine Sheet punching machine Our team comprises following professionals: • • • • • Machine operators Quality auditors Admin Skilled/Technical Semi skilled The salient features of the products • • • • New and innovative kind of bread Available in many flavor Available in different shapes which makes it more attractive High quality bread QUALITY CONTROL PLANS: INSPECTION we are specially take inspection for all the stages of production of all kind of breads. These are the daily meals and people were consuming it upto large scale.
we use questionnaire and personel interview method to conduct our research work. TACTICS SBU’s Geographic Gud bread Education Income group literate Quality and price middle & high urban Application . o People from the age of 22 to 35 years will like it 23%. Segmentation Target Positioning Target market The Bread Baker’s are providing their products in different sizes in very reasonable prices. which shows that the flavored bread is one of the innovations and people are willing to use it. Therefore it has huge market and this market has so much to attract new entrant if he/she provide something innovative and better product. Market Research Before starting any business it is important to recognize the need of customer that either there is demand of particular product exists or not. o People from the age of 35 onwards will like it 14% This research shows that younger are more willing to use our product. The Bread Bakers conducted the research.Market Analysis Bread comes under FMCG goods and it consume in huge amount as a breakfast on daily basis. Age Distribution The Bread Bakers conducted the research on the basis of age sector to analyze that which age sector will like our bread most. Our main emphasis is on middle-income group and higher income group. According to our research: o Children from age of 10 to 15 years will like it 38%. o People from the age of 15 to 22 years will like it 25%. Page no: 11 .
Market Distribution The Bread Baker’s also conducted research on the basis that where they should provide there product in which quantity The research shows that we should provide our product in Gomti Nagar market 43% of our production. 12% in alambagh area and 4% in rest of the area. 30/o Chocolate flavored bread Rs. 30/- Page no: 12 . 8% in Nishatganj area. There are many pricing strategies but we have to choose this penetration pricing strategy because we are the new entrants & we want to capture a big market share so we have chosen this type of strategy to penetrate in the market. 10 % in chinat area near colleges hostel and personal hostel. o Fruit Nut Breads Rs. 23% in Indira nagar. PRICES All the existing bakeries are offering the following prices of the breads Milky bread Rs 25 Simple bread Rs 20 Diet bread Rs 30 But we are providing the following prices of the flavored breads. our main focus is on to provide bread to middle and high income group people on daily basis. PRICING STRATEGY Penetration pricing As we are in the initial stage so our main emphasis is to penetrate in the market by capturing the market share. 30/o 100% Whole Wheat Bread Rs. Strategies As we are providing bread in different flavor and different shapes and no other player providing this so we do not have any direct completion but our product can be better substitute for regular bread .
Weaknesses o No brand recognition. may people don’t accept the flavored bread o Competitors working in Islamabad may enter in local market. Our name in baking industry is new so most of the people are not familiar with bread bakers. • Reasonable prices. Our bread will be easy available for lower income group also. Threats o New product.Entrance Strategy The entry growth strategy for The Bread Bakers should be to focus initially and more specially to youth and status-quo customers. • No specific competitor. o No separate outlet. May Meer and China try to copy it. Page no: 13 . Marketing Strategy The Bread Bakers needs a comprehensive marketing strategy based on company’s philosophy. So the number of customers with us will be more than any other competitor in flavored bread baking industry. As we are newly introduce in Gujranwala so the customer is not oriented in the brand. o Imitation by existing bakeries. • Easy availability. This product is introducing in Gujranwala for the very first time so there is no specific competitor of bread bakers so this is an opportunity. o No customer orientation in local areas. Opportunities o First mover advantage. SWOT Analysis Strengths • New product innovation in local area. potential growth strategy and long-term objectives of gaining a strong hold in the bread industry. Our outlet is Meer and China and these bakeries have their outlets in main parts of the city so the access to our product is very easy. So it will attract the people of local area. We don’t have enough finance to construct our separate outlet.
The Project Profile has been prepared on the basis of Single Shift of 8 hours a day and 25-working days in a month at 75% efficiency. 2. The margin money required is the minimum 30% of the total capital investment. When a tailor made project profile is prepared. The rental value for the accommodation of office. the capacity utilization will be 70% followed by 85% in the second year with 100% in the subsequent years. Basis and Presumptions: 1. 3.mtr. The rate of salaries and wages for skilled workers and others are on the basis of the minimum rates in the state of U. 7. The rates in respect of machinery.20 per Sq. 9. necessary changes are to be made. Interest rate for the fixed and working capital has been taken @15% on an average whether financed by the Bankers or Financial Institutions. 8. equipment and raw materials are those prevailing at the time of preparation of the project profile and are likely to vary from place to place and supplier to supplier. Page no: 14 . workshop and other covered area has been taken @ Rs. completion of all formalities.P. 5. market surveys and tie-ups etc. 4. The gestation period in implementation of the project may be to the tune of 6 to 9 months which include making all arrangements. The pay back period may be 5-years after the initial gestation period. It is presumed that in the first year.Financial Plan Financial Plan The following sections will outline important financial assumptions. 6.
200 2010-2011 120.400 38.450 2009-10 96.400 80.000 324.900 36.000 Page no: 15 .000 40.000 59.000 23.600 115.000 48.000 60.000 142.000 84.400 251.000 48.920 32.700 2008-09 22.000 2010-2011 36.000 120.000 100.000 400.770 10.000 96.000 18.400 33.Sales Forecast Sales Foercast SALES Simple Breads Milky breads Diet breads Flavor breads Total Sales Direct Cost of Sales Simple Breads Milky breads Diet breads Flavor breads Subtotal Direct Cost of Sales 2008-09 75.800 14.000 2009-10 28.760 89.
000 Food Processing Mixers.000 10.000 35. Bakery Machinery 1. Rotatary Rack Ovens 1 High Reliablity Rotatory Rack Ovens • 45. 1. 8.) 2.000 Qty. Meter 2. Bread Slicing Machine 2 Oil-Gas Heated Deck Oven 5. Machinery and Equipments SI Description No. 20 Sq.000 5. 3. 7.) 2. Bakery Oven Amount (in Rs. 2. Land and Building (rented) @Rs.000 1 6.Financial Aspects A.000 15.000 35. Meter (per month) Covered Area 100 Sq.000 1 • Electric Deck Oven - Page no: 16 . Fixed Capital 1. Oil Drye • • 1 4.75. Land and Building SI Description No. 5. 1 1 Amount (Rs.
9. Pre-Operative Expense Total Fixed Capital (1+2+3) 5.000 Page no: 17 . 10.17. Electrification and Installation Charges @ 10% of cost of Plant and Machinery Cost of Office furniture and Equipment etc.000 - 30.97.000 3.000 4. Total - 42.000 20.
000 1. 1.000 1.000 4. 2. 6. No. Skilled and Unskilled 1.000 2. Wheat Flour (Maida) 2. Amount (in Rs. Salary (in Rs. Working Capital (per month) (i) Staff and Labour SI. eggs etc Packaging material Total 1000 1.000 3. milk.000 Page no: 18 .000 9. flavor . Yeast . Skilled Worker Semi-skilled Worker Helper Total Perquisite @ 15% Total (ii) Raw Material SI Description No.25000 3.) 32. 3.500 No.000 46.500 6.000 3. Designation (a) Administrative and Supervisory Production Manager Supervisor/Store-keeper Accountant Salesman Peon/Watchman Sweeper 1 1 1 3 1 1 5.000 4.000 8. 2.) (b) Technical. 4.000 1.000 3 2 4 3.500 5.500 2. 3. 5. 4000 Kg Rate (in Rs.) 8 per Kg.) Amount (in Rs.B.000 5.975 53.475 Qty. 1.47.04.000 9.000 2.000 3. 3.000 2.
000 3.000 500 500 10. 5.000 6.) 5. 4. 3. 2.000 500 1. Rent Postage and Stationery Advertisement and Publicity. 7.04.000 500 3. Description 1.000 1.000 6. 4.425 Page no: 19 . 3.20. 2. Salaries and Wages Raw material Utilities Other Contingent Expenses Total Working Capital (for 3 months) [3.73. 6. 8.475 x 3] Rs.) 2.(iii) Utilities SI No.000 10. Telephone Repair and Maintenance Transportation Consumables Sales Expenses Insurance Miscellaneous Expenses Total Amount (in Rs.475 3.475 (v) Total Recurring Expenditure (per month) SI No.000 (iv) Other Contingent Expenses SI No.000 Amount (in Rs) 53.73.000 500 500 1. 9. 11. 2. Description 1. 1. 10. Legal Fee etc. Electricity Water Utilities Total Amount (in Rs.
Total Capital Investment Particulars Fixed Capital Working Capital (for 3 months) Total Amount (in Rs.00 percentage 53 47 sourcesof finance owner's capital loan Financial Analysis Page no: 20 .00 8.) 5. gud bread is planning to procure its fund through two major sources.C. Source of finance Owner’s capital Loan from (in INR lakhs) 9.425 16.000 11.425 FINANCING OF THE PROJECT The enterprise.37.17.20.
800 4. Milky bread Qty.81.000 7.000 1.700 46.80. 4.000 1.400 Simple bread 5900 Diet bread 6000 Flavor bread 6000 Total Less: Sales expenses@ 35% Net Sales Realization (turn over) (per month) Net Sales Realization (turn over) (per year) 3. Turn over (per annum) SI No.200 56. 3.) 25 20 30 30 Amount (in Rs.000 2.) 10000 Rate (per Kg.73.700 6.614 47. 22.214.171.124. (units.014 ~ 47. Cost of Production 1.000 1.) 2.80.45. Cost of Production (per annum) SI No. 2. 2.000 2. Total Recurring Cost Depreciation on Machinery and Equipment @10% Depreciation on Office Equipments And Furniture @ 20% Interest on Total Capital Investment @15% Total Amount (in Rs.78. 3.) 44. Net Profit (per annum) (Before Income Tax) Page no: 21 .1.54. Description 1.80.000 2.28.
8.000 = Rs.78.98.400 Projected Profit and Loss Page no: 22 .Sales – Cost of Production = 56.80.400 – 47.
400 12.771 13.840 7.000 4.56. for Tax 35% Profit after Tax 2010-11 56.756 Projected Balance Sheet Page no: 23 .543 15.820 2012-13 81.543 6.39.02.400 3.45.000 7.000 9.456 11.000 6.629 6.96. Legal Fee etc.95.543 15.20.450 2.000 11.000 6.086 7.29.000 46.484 8.000 2011-12 126.96.36.1990 24.000 12.771 13.79.714 188.8.131.52.429 1. Telephone Repair and Maintenance Transportation Consumables Sales Expenses Insurance Dep.000 1.99.188 3.000 184.108.40.2060 14.000 6.000 2.98.827 18.600 8. Rent Postage and Stationery Advertisement and Publicity.543 6.000 6.000 6.000 36.543 45.771 40. on office equipments & furniture Miscellaneous Expenses Total Indirect Expenses (D) Profit Before Interest & Tax(C – D) Less Interest Profit Before Tax Less Prov.000 6.11.207 44.The following table shows the projected profit and loss for gud bread.48.68.240 4.696 24.400 6.429 42.38.173 24.994 220.127.116.110 36. Particulars Sales (A) Less: -Direct cost of sales: Wages & Salaries Raw Materials Utilities Dep.78.82.000 3.543 1.000 12.714 52.086 7.84.985 16.700 44.83.857 37.771 1.36.200 7.41.000 72.030 53.08.440 5.70.258 18.104.22.1688 13. on machinery & equipments Cost of Good Sold (B) Gross Profit (A – B) (C) Less :–Indirect Exp.771 6.800 6.000 6.380 15.827 62.298 7.543 7.
000 7.65.721 4.The following table represents the financial position of the gud bread at the end of each of the three upcoming fiscal years.66.200 14.400 22.214.171.1243 37.23.000 70.000 37.000 30.91.000 3.25.25.019 3.45.000 31.425 8.225 17.900 3.00.78.000 50.225 9.62. Particulars Liabilities: Owner’s Fund Retained Earnings Sundry Creditors Total Liabilities Assets Fixed Assets: Machinery & Equipments Office Furniture Pre-operative Expenses Current Assets Receivables Stock in Hand Cash at Bank Cash in Hand Total Assets 2010-11 16.425 2011-12 126.96.36.199 1.200 90.721 Business Ratios Page no: 24 .000 20.425 4.000 3.300 24.98.025 11.300 17.200 1.481 13.30.000 17.75.84.04.90.37.994 188.8.131.520 19.278 11.62.394 31.02.019 2012-13 21.16.37.
Total asets turnover ratio = Sales / Total assets = 56.000 = 10. Gross Profit ratio = (Gross Profit/Sales) * 100 = (184.108.40.206. Net profit ratio = (Profit after tax / Sales) * 100 = (5.87% 4.70. Fixed assets turnover ratio = Sales / Fixed assets = 56.17.000 / 56.960/ 56.22 times Page no: 25 .37.425 = 3.400) * 100 = 10. Return on total investment = (EBIT / Total Investment)* 100 = (8.1.37% 220.127.116.110 / 16.28% 3.425) *100 = 54.78.98 time 5.400 / 5.62.400 / 17.400)*100 =22.
400/ 36.21 times Break even analysis Page no: 26 .Stock turnover ratio = Cost of goods sold / Stock = 44.6.08.000 = 1.48.
45.680 28.P = = = BEP (in Rs) BEP (in Months) Monthly Sales = Sales / 12 months = 56.90.700 24.49.56.000 6.30.SI No.000 2.206 = Rs 8.614 6.88 months Cash Flow Statement Page no: 27 .400/12 BEP (in months) = Break even Sales / Monthly Sales =8. tools and furniture Rent Interest on borrowing (Total Investment) Insurance 40% of Salary 40% of Utilities 40% of Other Contingent Expenses (excluding rent and insurance) Total Fixed Cost X 100 / Fixed cost + Profit 6.) 52.78.78 Amount (in Rs.49.78.400*6.794 + 8.800 36.794 B.18.104.22.1684/ 41.49.E.200 = 1.400 42% =Sales * Fixed cost / Contribution = 56.218 / 4. equipment.794 X 100 / 6. (a) (b) (c) (d) (e) (f) (g) Fixed Cost (per annum) Total Depreciation (on machine.000 2.217.49.
19.053 2.225 6.82.29 31.28.000 - 20.483 41.29 31.600 3.696 2.996 4 BIBLIOGRAPHY Page no: 28 .07.29 Balance 4 Cash from 8.702 Cash Flow Statement: Inflow 2009-10 2010-11 Outflow Opening 9.440 52.83.667 17.200 8.84.456 3.45.298 46.70 Closing operation 2 Balance 17.855 20.28.07.99 4 6 2009-10 2010-11 - 22.214.171.124.Calculation of Cash From Operation: Particulars Net Profits Add: Interest Tax Depreciation Total Add: Decrease in Current Assets Add: Increase in Current Liabilities i) Sundry Creditors Less: Increase in Current Assets i) Receivables ii) Stock Less: Decrease in Current Liabilities Cash From Operation 2008-09 5.14.996 4 17.700 2009-10 7.756 3.20.439 17.99.100 126.96.36.199.98.960 2.700 11.855 - - 20.000 30.280 2010-11 188.8.131.52.948 4.29 184.108.40.2060 220.127.116.115 14.
com http://www.bplans. shrinivasan Page no: 29 .org http://www.businessplans.businessplanarchive.org Books: • Marketing Management By Philip Kotler & Keller • Accounting for Managers By N.Links: • • • • http://www.com http://www.morebusiness.
Of Busi. Admn. Submitted by:Prakhar Singh(61138) MBA (E-business) Department of Business Administration Lucknow University Lucknow Page no: 30 . Ajai Prakash Submitted to: Dr. Ajai Prakash Dept.A Comprehensive Project For The partial fulfillment of degree course Masters of Business Administration (MBA) A Business Plan Reader’s Choice Book Store Project Guide.Dr.
Acknowledgement I hereby take sense the of opportunity great to express awe my and profound reverence. gratitude to all of them who have helped me in the success completion of this desertion project. for his guidance and support rendered to me in solving my problems and difficulties that I faced in completing this task on such a varied and vast subject I will be failing in my duty. Lucknow University. Prakhar Singh. if I do not acknowledge my heartfelt thanks to Dr. I wish to express my sincere gratitude to Dr. Page no: 31 . Department of Business for their Administration. J k Sharma (HoD). Last but not the least I take this opportunity to express my heartfelt appreciation for my colleagues for their support and encouragement. valuable guidance and support rendered to me. Mr.Ajai prakash.Department of Business Administration. Lucknow University. Sanjay Medhavi.
Page no: 32 . degree. or diploma. Also that this project is not submitted anywhere for the award of any research work. Prakhar Singh MBA (E-Business) Roll No: 61138 .Declaration This comprehensive project titled Reader’s Choice Book Store Is my own piece of work and has been prepared for the partial fulfillment of MBA(E-Business) Degree (2005-7).
EXECUTIVE SUMMARY Page no: 33 .
Page no: 34 . plus a relaxing . The business is a book and magazine store.friendly environment that encourages browsing and book reading.Prakhar Singh who himself is a voracious book reader and through this book store intends to convert his hobby into a profitable business. 2008 in the city of Varanasi. a dominant selection of products. Ownership: Reader’s Choice Books will be a sole proprietorship business venture in the city of Varanasi. It is the goal of the company owner to attract and retain customers with the habit of book reading.READER’S CHOICE BOOKS INTRODUCTION Company: Reader’s Choice Books is a new retail business venture due to begin operations on may 1. a competitive variety of services including hard to find book search or on demand book availability. The company will be owned by Mr. This the owner tends to accomplish through low price.
business.religion etc. No production will take place on site. Other types of books will be added depending on customer demand. Reader’s Choice Books will also have a relaxed reading room that we will encourage through the placement of chairs. tourism and other types of books. children’s. In addition to bestsellers in both fiction and nonfiction.. Production of Products and Services: All book and magazine titles stocked in our store will be ordered directly from the publisher or an approved representative.couches etc. In addition .hobbies.we offer a search and order service for customer seekng to find hard to get items. hobbies. we will also introduce a special order service for any books or magazines that we do not have in stock. Future Products and Services: We will continue to expand and diversify our book and magazine content according to the wishes of our customers. the company will also offer a selection of books pertaining to tourism.Products/Services: Reader’s Choice Books will offer a wide range of books and magazines including just about every conceivable category namely fiction . A selection of books written by nationally and internationally renowned authors will also be made available. Once we have established a rapport with distributors and publishers. non-fiction. Part of the shelf space will be allocated to children's books and related publications. Page no: 35 . science.
secondary and post secondary schools) and Professional and Reference (University Press.Key Product Segments: Book sales can be segmented into three major segments: Pleasure (mass market. action. The pleasure category can be broken down further into hard cover and paperback sales. even in modern times. The book store will be located just outside the vicinity of the university in Lanka market. subject specific. Page no: 36 . mystery. subscription reference). Educational (textbooks and related material for elementary. The presence of institutions like the Banaras Hindu University in the city has helped. Business Location: The proposed book store will be situated in the city of Varanasi which for hundreds of years has been designated as one of the pioneer centres of learning. romance. humour. general non fiction). to retain the same old fame as a distinguished centre to earn knowledge.
2) School children: The location where the business is supposed to be located also has 3-4 schools situated nearby. Milions of tourist visit here every year. famous as the cultural capital of India and also for it’s rich culture and heritage. Banaras hindu university is the largest residential university of Asia and so it will prove to be the best market for the store with students coming in and browsing and buying the books from the store. And a lot among them are in search of proper books and reading materials that could provide them information about the city or India and it’s culture. 3) Tourists: Varanasi is a world famous tourist spot. So these school students will also form a large part of the supposed target market of the business. The XYZ Book store will provide such tourists relevant books and reading material as they need at reasonable prices. who reside and study in there.Target Market: The customer base of the proposed business has been divided into three parts: 1) Students of the University: The major customer base of the book store will be in the form of the thousands of students of the university. Page no: 37 .
Objectives: Our primary objectives over the next year are: 1. Attain and maintain a position as the leading retailer of books and magazines in and around Varanasi City. magazines. Secure agreements with major magazine and book distributors in the country to secure uninteruupted supply of required books. 3. 2. The company additionally seeks to provide a comfortable atmosphere for its clients that promotes browsing.Mission: Reader’s Choice Book's mission is to provide quality literature of all types at the lowest possible prices in Varanasi. Complete start up activities. and an enjoyable environment to spend extend time in. which lower our book acquisition costs and allows our customers to discard unwanted books. acquire inventory and open the business to our customers. Page no: 38 . relaxation. Reader’s Choice attraction to its customers will be our large selection of books. and our purchasing/buyback option.
a fee to cover postage and handling costs will be added to the cover price. books and magazines will be sold for the amount listed on the cover. From the store's perspective. those books and magazines in demand by our customers will be ordered for the store. If a magazine or type of book is not selling adequately enough. Page no: 39 . Depending on the distributor. For specialty orders. The purchase process is straightforward in that a customer buys the book or magazine off the shelves and takes it away. This means that the purchaser did not specifically intend to buy a specific book or magazine when they entered the store.Purchase Process and Buying Criteria: A recent Consumer markets survey indicate that 40% of retail book purchases and 70% of retail magazine purchases are "impulse buys". visual appeal. we will not continue to stock it. relevance of subject matter and the customer's reading ability. Pricing Strategy: With the exception of sales events and clearances of stock that is not moving of the shelves. Customer buying criteria for books and magazines depends on a number of standard variables including price. the store will receive a 25% to 35% discount off of the cover prices.
and radio advertisements to capture customers. Besides Reader’s Choice competitive edge will be the lower prices we will charge our customers and the dominant selection above what our Page no: 40 . One critical procedure we will be establishing is to insure top customer service and reliability and that our store always has enough inventory of all our products. Also none of the two competitors have either the browsing facility nor the on demand availability of books service. We believe this in itself is its own seller. But none of them has the type of products and service offerings as Reader’s Choice Books . billboards. In order to capture attention and sales our company will use prominent signs at the store locations. Competitive Advantages: The location in which the book store is supposed to be opened has two other major book stores namely Student’s Friends and Banaras Book Corporation. Marketing Strategy: One of the most critical elements of Flyleaf Book's success will be its marketing and advertising. Both Student’s Friends and Banaras Book Corporation mainly concentrate on educational reading material. media bites on local news.Sales Strategy: Since our store will be a stand alone facility. We will be using industry data on inventory for bookstore chains to assist us. there is little in the way to directly influence how we close the sale other than to have an attractive storefront with our low prices and excellent selection. None of them is involved very much in non-educational reading material as provided by our book store.
bookstore rivals can offer. comforting environment that will retain customers. As stated before. We plan to create these advantages in a new. in the bookstore industry. Page no: 41 . low cost and dominate selection are the two success criteria.
FINANCIAL PLAN Page no: 42 .
BREAK EVEN ANALYSIS: Selling price per unit : Rs. 3) Tax rate 30%.0000 2.000 21. 150 FIXED COSTS AMOUNT(RS.000 25.000 12.250 Page no: 43 .98.Important Assumptions: 1)All sales on cash basis.250 72.000 10.) Advertisement Depreciation Salary (Worker) Stationary Electricity Rent Total Fixed Costs: 50. 250 Variable cost per tablet: Rs. 2)All merchandise acquisition on cash.
V.P.C.) = 298250/250-150 = 2982 books Projected monthly sales : 350 books Break even point (months): 2982/350 = 9 months(Approx.Break even point (in units) = total fixed costs/ (S.) Page no: 44 .
DEPRECIATION: Assumption: Depreciation@25% Furniture : 20.000 Inverter : 15.000 Book Shelfs : 25.000 Total Yearly Dep.000 Computer : 25.: 85000*25/100= Rs.000 Total : 85.21250. Page no: 45 .
250 72000 50000 10000 25000 120000 301750 90525 211225 Page no: 46 .) Cost Of Goods Sold Gross margin 2008 4000 10.00.000 4.000 7.000 6.250 72000 50000 10000 25000 120000 201750 60525 141225 21.000 9.750 30525 71225 21.000 6.000 Expenses Depcreciation salaries advertisement stationary Electricity Rent Profit before Tax Tax @ 30% Net Profit 21.50.000 2009 5000 12.00.) Sales(in Rs.00.250 72000 50000 10000 25000 120000 1.00.01.50.Projected Profit and Loss Statement: YEAR Sales (in units.000 5.00.00.00.000 2010 6000 15.
00 0 Projected cash A/c (2nd Year): Page no: 47 .00 0 11.Projected cash A/c (1st Year): Particulars To bal.000 142475 11.00. B/d To sales Amount 100000 1000000 Particulars By purchases By Salaries By Advertisement By Stationary By electricity By Rent By tax By drawings By Bal C/d Amount 600000 72000 50000 10000 25000 120000 30525 50.00.
42.47 5 14.47 5 Projected cash A/c (3rd Particulars To bal.Particulars To bal. B/d To sales Amount 142475 1250000 Particulars By purchases By Salaries By Advertisement By Stationary By electricity By Rent By tax By drawings By Bal C/d Amount 7.000 304950 14.42.50000 72000 50000 10000 25000 120000 60525 50. B/d To sales Year): Amount 900000 72000 50000 10000 Amount 304950 1500000 Particulars By purchases By Salaries By Advertisement By Stationary Page no: 48 .
000 487425 1804950 1804950 PROJECTED BALANCE SHEET: Assets Current Assets Cash Fixed Assets (Less Dep. 2010 15000 11250 18750 18750 10000 7500 12500 12500 5000 3750 6250 6250 Total 206225 347450 508675 Page no: 49 .By electricity By Rent By tax By drawings By Bal C/d 25000 120000 90525 50.Dec. 31st 2009 Dec. 31st.) furniture Inverter Book Shelfs Computer 142475 304950 487425 31st 2008 Dec.
Financial Management. Azhar Kazmi Second edition Tata McGraw Hill Publication 2. Seventh Indian Reprint Kotler Philip Page no: 50 . Business Policy and Strategic Management. eighth edition I M Pandey Vikas Publishing House 3 Marketing Management.LIABILITIES&CAPITA L capital Profit Less : drawings 185000 71225 50000 256225 141225 50000 347450 211225 50000 Total Liabilities 206225 347450 508675 BIBLIOGRAPHY 1.
Ltd. Page no: 51 .Pearson Education (Singapore) Pte.
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