Formation f Business Plan

 
Jhorna Ice-cream 
 
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Course Code: F-306
Course Name: Entrepreneurship & Project Development
 
 
Prepared For
Md. Motiar Rahman
Lecturer,
Department of Finance
University of ZHSUST
 
 
Prepared By
Group No # 12
Department of Finance
University of ZHSUST
B.B.A 19th Batch
Formation of Business Plan
Group Profile
 
Group Number:12
Section: B
SL
Name
ID
Remarks
01
Mohammad Monirul Islam Monir
19-030
02
Md. Arif Sarder
19-036
03
Atia Tahira
19-056
04
Imran Bhuyan
19-144
05
Noor Mohammad
19-256
 
 
 
 
 Formation of Business Plan

Acknowledgement
To complete the term paper we do not deserve all credit. A lot of people guided
us with their valuable advice. They also helped us providing with information
related to the report.
First of all, we would like to give thank to the almighty Allah for helping us to do
the report perfectly.
Then, we would like to thank with humble respect to our course (BUS-301:
Entrepreneurship ) teacher Md. Motiar Rahman, Lecturer, Department of
Management Studies, University of ZHSUST. Her constant presence and
instructions helped us to do our best. It would have been a tough-task for us to
complete this term paper without her guidance. She was so helpful that she took
two special classes in which she gave us instructions about how to make the
report.
Last but not least, we like to thank our seniors, friends and classmates whoever
helped us to complete the term paper.
Though this report is prepared for meeting our educational purpose, it might be
used for other purposes
 Formation of Business Plan
Letter of Transmittal
 
28 January, 2016
Md. Motiar Rahman
Lecturer,
Department of Management
Faculty of Business Studies,
University of ZHSUST.
 
Subject: Submission of term paper.
 
Dear Sir,
With great pleasure and honor we are submitting our term paper titled “Business Plan Jhorna Ice-cream” of the course “BUS-301:
Entrepreneurship development”. The term paper represents business plan preparation, and financial analysis of the Business Plan
Jhorna Ice-cream Though this analysis has been prepared for educational purpose, it will be an effective one to achieve the goal in
practical field also.
We have tried our level best to accommodate as much information and relevant issues as possible and follow the instructions that you
have given us.
We would like to thank you for providing us with the opportunity to prepare this term paper.
Sincerely Yours,
 
28.01.2016
Imran Bhuyan
On behalf of the group.
 
 
 
 
 Formation of Business Plan

Executive Summary:
At first, 1st January 2016 ,seven entrepreneurs decided to start an
ice-cream company named ‘Jharna’. This company will be engaged
to manufacture hyginic ice-cream for both child and adult persons.
For this purpose ‘Jhorna Ice-cream Company’ is registered as private
limited company according to the Company Act,1994. The
objectives of the company are- to manufacture hygienic ice-cream
for all people, to export in foreign country after meeting local
demand, creating jobs opportunity, to play an important role for
their own and country’s economic development. We will primarily
store the product at warehouse then distribute among the dealers.
There are huge number of boys and girls in our country and ice-
cream is one of their favorite food.
 Formation of Business Plan

Our market analyses predict that there is huge demand of this

product. Our strengths such as First mover advantage, Price
leadership, and Strong relation with related parties, Low risk and
diverse portfolio will help the firm gain the market and ultimately
success. We will choose school, college and university goers boys
and girls as our target market. Our main opportunity is that there
increasing number of internet users in Bangladesh. We hold a strong
distribution channel. Our analysis shows very favorable results which
indicate the feasibility and viability of our venture. We have to
concern about the business ethics that by any activity of our
business people cannot harm.
 Formation of Business Plan

Introduction
In this section of the term paper, we have described the Objectives,
Methodology, Limitations and scope of the Report.
Objectives
The objectives of this report are-
Applying our theoretical knowledge what we’ve learnt throughout this course.
Knowing how to make a business plan.
Developing our practical knowledge and skills
Being able to conduct a project feasibility study.
Developing our analytical ability.
Methodology
Studying class lectures and text books
Having group discussions
Surfing internet
Gathering information about ice-cream company
Analyzing Data and accomplishing them into the report
 Formation of Business Plan

Limitations
We faced some constrains and limitation during the preparation of
the term paper. That are-
We have a very little practical knowledge of going for analytical work what
made the job quite challenging for us.
It was quite difficult to collect all the information needed for our tasks.
It was quite challenging and cumbersome to have the appointment of all
these entrepreneurs of Barisal and to collect data from them
Scope
We have some scopes and advantages which helps the work to be
completed easily and thoroughly. This are-
We got enough time to prepare the report.
Our course teacher also helped, supported and encouraged us by
supervising our work progress and proving corrections/suggestions where
necessary.
 Formation of Business Plan
 

Table of ContentIntroduction 6
1.Business Introduction 9
1.1 General Description of the Venture: 10
1.2 Industry Background: 10
1.3 Company Mission: 10
1.4 Company Vision: 10
1.5 Company Value: 10
1.6 Goal/Potential of the Venture and Milestone: 10
2.Management Aspects 11
2.1 The promoters and summary of their qualification 12
· Share Holding of the Owner 12
2.2 Legal Form of Business 12
2.3 Organization Structure 13
3.Technical Aspect 15
3.1 Services 16
3.2 Location 17
3.3 Information & Communication Technology 17
3.4 Equipment 17
 Formation of Business Plan

4. Marketing Aspects 18
4.1 CURRENT SCENARIO IN BANGLADESH 19
4.2 SITUATION ANALYSIS 19
4.2.1 MARKET SUMMARY 19
4.2.2 SWOT ANALYSIS 19
4.2.3 COMPETITOR ANALYSIS 22
· Competitor Analysis [Using Porter’s Five Forces Model] 22
4.3 MARKETING MIX ANALYSIS 24
5. Financial Aspects 28
5.1 Cost of the project 29
5.2 Means of Financing 29
5.3 Cost of service/ Sales 30
 Formation of Business Plan

5.4 Working Capital Requirements 30

5.5 Expected Cash Generation 30
5.6 Projected Income Statement 31
5.6.1 Projected Income Statement 31
5.6.2 Tax Calculation 31
5.6.3 Depreciation Calculation 32
5.6.4 Projected Balance Sheet 32
5.6.5 Ratio analysis 33
5.6.6 OCF Calculation 33
5.6.7 NPV Calculation 33
5.6.8 Scenario analysis 34
6. Socio Economic Aspects 35
  
 
1. Business Introduction
 
 Formation of Business Plan

 
1.1 General Description of the Venture:
Jhorna Ice-cream is a partnership organization that helps bridge the gap between
consumers and dealers and enables them to get the ideal product. We also offer
quality product, pack and shift service, information about product etc. Our aim is
to provide customers all the information in the market and get them in contact.
1.2 Industry Background:
There are no sufficient numbers of industries in Bangladesh. Our company
started at Tk. 9816000, but near future it will increase the capital.
1.3 Company Mission:
Our mission is to provide the highest quality service and other related services
and help our customers get product as quickly as possible. We strive to make
sure that with every deal we put our customers as well as business partners in an
advantageous position by establishing a profitable relationship.
 
 
 Formation of Business Plan

1.4 Company Vision:

Our vision is to become the leading ice-cream manufacturing
organization by ensuring that our customers will get cheap and
quality product.
1.5 Goal/Potential of the Venture and Milestone:
We provide unique services to our customers. We not only help
them find ice-cream but also provide some additional services. We
developed a website where consumers and dealers can give choice
as per their requirements and we will also collect information and
categorize that information. We provide our services at lowest
possible price which is another unique aspect of our service.
Formation of Business Plan

2.Management Aspects
 
 Formation of Business Plan

2.1 The promoters and summary of their qualification

The promoters of the business will also manage the business. The promoters of this business
are-
Mohammad Monirul Islam Monir
Md. Arif Sarder
Atia Tahira
Imran Bhuyan
Noor Mohammad
The promoters have sound academic background on information collection, database
management, customer relationship management and business management.
Share Holding of the Owner
 
 
 
 
 
 Formation of Business Plan

 
Name
  SL. Share Holding
1 Mohammad Monirul Islam Monir 10%
  2 Md. Arif Sarder 10%

3 Atia Tahira 10%

4 Imran Bhuyan 10%

5 Noor Mohammad 10%

6 Venture Capital Firm 30%

7 Working Partner 20%

 Formation of Business Plan

2.2 Legal Form of Business

The business will be incorporated as a partnership business. The
venture capital firm will be registered as a limited partnership firm.
The partnership contract will be written and registered.
 Formation of Business Plan

2.3 Organization Structure

CEO
The chief executive officer will be the highest authority in decision
making. He will co-ordinate the work of the managers. He will also
be responsible for managing the human resources as the employees
will not be under any department. He will also work as the
spokesperson of the firm.
Manager: Website and Database
The website and database manager will be responsible for database
creation and update. He will also supervise the access to database
and security of the website. He will also update the website
regularly.
Manager: Marketing & sales
The marketing and sales manager will be responsible for marketing
and sales related activities of the firm.
 Formation of Business Plan

Manager: Accounting and Finance

The accounting and finance manager will keep the accounting
records, manage the fund, prepare the budget etc.
Manager: Customer and Supplier Relation
He will maintain active relationship with the customers and different
related parties such as landlords, real-estate brokers, transport
agency, technician etc.
Manager: Information collection
He will collect information like house available for rent, the details of
those houses, real-estate related information etc. from different
related parties
 Formation of Business Plan
Human Resource Management
CEO will manage the human resources. As a service providing
business, HRM is very much important because customer
satisfaction and quality of service depend largely on the
performance of the employees.
Staffing Need
The business will need 15 employees to carry on its operation.
However, with the growth of business number of employees will
increase.
Staffing Budget
Each employee will be given Tk.10000 per month and 10% of the net
profit will be distributed to employees as they are the working
partner.
 
 
 Formation of Business Plan
 
3.Technical Aspect
 
 Formation of Business Plan
 

 3.1 Services
We provide a variety of service for customers who want to get
information about ice-cream and can also get some exclusive
services together related to this. A brief details of the services we
will offer is given below-
Website
We will develop a website where both customers and dealers and
can give choice about their needs. We will categorize all this
information according to location, the price, types of customer’s
wanted (i.e. family, bachelor, mess etc.). This will be the unique
feature of our website.
 Formation of Business Plan

  Advertising
We will do the advertising for furniture company, interior designers and home decorating company,
household necessities etc.
3.2 Location
We will primarily provide services in Airport, Uttara, Abdullahpur and Tongi. If the brand develops we will
expand our area of services, especially in Mohammadpur, Mirpur, Gulshan, Banai and Dhanmondi. Our
home office will be set up in Uttora(main branch).

3.3 Information & Communication Technology

Application of ICT is the first and foremost priority in our business. Website development, maintaining
relationship with related parties will need heavy use of ICT.
3.4 Equipment
Equipment such as computer, modem, IPS, Telephone, etc. will be used. Air Conditioner for office will be
necessary.
Utilities
Internet, Telephone and electricity bills are the main utilities.
Vehicles
Employees will need motorcycle to communicate with clients.
 
 
 
 
 Formation of Business Plan
 
 
 
 
4. Marketing Aspects
 Formation of Business Plan
 Product Description: The objectives of our industry is to produce quality ice-
cream and marketing it. Our ice-cream is hygienic, manufactured and packed
automatically by machine, approved by Bangladesh Standards and Testing
Institution (BSTI). We confidently say that our ice-cream’s quality is better than
others. We use trade mark, maintain specific date for marketing presenting the
duration of consumption. We do not adulterate, do not copy and do not sell date
expired ice-cream. Quality is our strength. So, we can believe that we can meet all
customer’s demand.
 
 
 
 
 Formation of Business Plan
 
Strength
First mover advantage
Price leadership
Strong relation with related parties
Low risk
Diverse portfolio
Weakness
Inexperienced management
Inexperienced workforce
No historical background
Cost of safety of database
Opportunity
Acceptance of new ideas of Bangladeshi people
Increasing number of internet users
Threat
Future competition
Unfair competition
 
 
 
 
 Formation of Business Plan
 
 
4.2 SITUATION ANALYSIS
4.2.1 MARKET SUMMARY
In Dhaka city, more than 15million people live, among them 8
million are young people who like ice-cream . There are lots of
segments in this market. If everyday sale is 1 00000 piece then it will
reasonable. 
 Formation of Business Plan
 4.3 MARKETING MIX ANALYSIS
SERVICE IDENTIFICATION
We provide a variety of service for consumers who want to get information
about price and quality can also get some exclusive services together related
to this. A brief details of the services we will offer is given below-
Website
We will provide a free website for both dealers and consumers to give
advertisements about their needs. We will also collect information about the
price and quality of others.
Unique feature: Categorized information according to location, the amount
of price, types of consumers wanted (i.e. family, bachelor, mess etc.).
Pack & Shift
We will provide transportation facility to dealers to help them. We will
provide insurance facility and take care about consumers.
 
 
 
 Formation of Business Plan
  Ice –cream Brokerage and consultancy
We will provide service of brokerage to find out suitable land
according to their needs. And also provide the information about
our products. We will also help them find out the authenticity of the
quality.
.
Advertising
We will do the advertising for businesses, commitment, interior
designers, and distributor channels etc.

 
 
 Formation of Business Plan
  
  TYPES OF DISTRIBUTION CHANNEL
Specially we want to know people about our business throw online
in the first stage .When our business develop by sometime we
promote it through advertisement , leaflet, newspaper or any other
media to know people who seek quality product. Save time and
money by using our Network of Sites distribution.  With network of
sites, you can submit your demand. 
 
 Formation of Business Plan
  
  Pricing Policies
We will follow a price leadership strategy, providing services for the lowest
prices possible to beat all existing and future competition.
Location
We will primarily provide services in Airport, Uttara, Abdullahpur and Tongi. If
the brand develops we will expand our area of services, especially in
Mohammadpur, Mirpur, Gulshan, Banani and Dhanmondi. Our home office
will be set up in Uttora(main branch).
Promotion
For promotion and marketing purposes, we will employ the use of online
advertisement, facebook campaigns, word-of-mouth by our first customers
and most importantly, direct approach to well-known professionals in offices
situated in our target market areas. We will try to keep the cost of all these
promotional activities as low as possible, to make our price leadership
strategy possible and successful.
The first six or seven months since setting up our business in the housing
industry will mostly constitute of promotional activities.
 
 Formation of Business Plan
  
  
5.Financial Aspects
 Formation of Business Plan
  Estimated total cost
particular TK.

Fixed
1. Land 1200000
2. Building 2600000
3. Honey tank 50000
4. Motor 100000
5. Bleeding tank 150000
6. Ammonia pipe 50000
7. Refrigerator 75000
8. Laboratory 20000
9. Pasteurizing 150000
Current 100000
10. Technology setting cost 50000
11. Contingency 50000
12. Other cost
Total
Employees and labor cost
5645000

816000
 Formation of Business Plan

Raw materials Working capital Tk.

1. Fat cream 2000kg 1500000

2. Milk powder 1200000
3. Container 21000
4. Sugar 90000
5. Can, cup and stick 200000
6. Wrapping paper 100000
Total
3300000
 Formation of Business Plan

Utilities Tk.
1. Electricity 300000
2. Gas 100000
3. Water 50000
4. Fare 40000
5. Stationery 25000
6. Telephone 25000
7. Maintenance 50000
8. Transportation 60000
9. Sales expense 100000
10. Insurance 25000
11. Taxi 30000
12. Advertisement 200000
13. Miscellaneous 50000
Total

1055000
 Formation of Business Plan
Total Working Capital: (3300000+1055000)Tk.=4355000 Tk.
Total Capital( Fixed and working):(5461000+4355000) Tk.=
9816000Tk.
Financial Plan:
It is assumed that working day 300 in a year in two shift. Production
in first year 3000 per day, 2nd year 3200 per day, 3rd year 3500 per
day. Selling price tk.10 per

Year Production quantity Sales TK.

1 300*3000 900000*10 9000000
2 300*3200 960000*10 9600000
2 300*3500 1050000*10 10500000
 Formation of Business Plan
Source of Capital:
1. Own fund 60%=58899600
2. Bank loan 40%= 3926400
 Formation of Business Plan
Projected Gross and Net profit

Particular 1st yr 2nd yr 3rd yd

Sales 9000000 9600000 10500000
Manufacturing cost 4355000 4355000 4300000
Gross profit 4645000 5345000 62000
Administrative cost:
Loan interest 12% 471168 471168 471168
Depreciation: 20000 20000 20000
Net profit (before tax) 3337832 3937832 4892832
Tax 10% 333783 393783 489283
Net profit 3004049 3544049 4403549
 Formation of Business Plan
Cash flow:

particular 1st yr 2nd yr 3rd yr

sales 9000000 9600000 10500000
Manufacturing cost 4355000 435000 4355000
interest 471168 471168 471168
Total out flow 4826168 4826168 4826168
cash balance 4173832 4873832 5673832
9000000 9600000 10500000
 Formation of Business Plan
Jharna Ice-cream company Ltd.
Balance sheet
31 December, 2016
Fixed assets: 0 yr 1st yr 2nd yr 3rd yr
Building 2600000 2600000 2600000 2600000
(-)Depreciation 20000 20000 20000
2600000 2580000 2580000 2580000
Other fixed Assets 100000 100000 80000 80000
Current assets :
Stored goods 100000 100000 100000
Ac. Receivable 50000 100000 100000
Cash 500000 550000 800000 900000
3200000 3380000 3660000 3760000
Capital and liability:
Owner’s fund 2000000 2000000 2000000 2000000
Long-term loan 800000 1000000 1000000 1000000
Short term loan 300000 300000 500000 6000000
Ac payable 100000 80000 60000 160000
3200000 3380000 3660000 3760000
 Formation of Business Plan
Appendix: Necessary deeds
i) Partnership contract
ii) Patent and copyright
iii) Sales contract
iv) Insurance policy
v) Production policy
Formation of Business Plan
6. Socio Economic Aspects
 Formation of Business Plan
BUSINESS ETHICS
We have to concern about the business ethics that by any activity of
our business people cannot harm. We must be aware of our ethical
issues like fraudulent. We will ensure transparency, commitment &
agility.
INFORMATION FLOW
We expect our initiatives will make the information flow easier.
People will get information easily and freely. We hope this will help
our country get one step ahead toward digitalization.
COMPETITIVE PRICING
We expect that if information is freely available, then customers will
be able to get the best product at the least price. Information will
optimize your decision.