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  • 1. SKY SHAMPOO PRIVATE COMPANYBUSINESS PLAN ON SHAMPOO PRODUCT VISHAL BHAYANI 11/24/2010
  • 2. A PRODUCT PROJECT REPORT ON SKY SHAMPOO PVT. LTD. -: Prepared by:- VISHAL BHAYANI M.B.A. (FINANCE) Roll no: -10 Academic Year 2010-11 - : Submitted To: -N.R. VEKARIYA INSTITUTE OF BUSINESS MGT. STUDIES ,JUNAGADH Guided by: - Dr. RAJESH PATEL 2
  • 3. DECLARATION I undersigned Mr. VISHAL R. BHAYANI the student ofM.B.A., here by declare that the project work presented is my ownwork and has been carried out and accomplished underN.R.VEKARIYA INSTITUTE OF BUSINESS MGT.STUDIES. This work has not been previously submitted to any otheruniversity or any other examination.Date: - Signature VISHAL BHAYANI 3
  • 4. PREFACE “PRACTISE MAKES A MAN PERFECT”. As a student Ihave made a product project report on my own so that I can applymy knowledge in practical report and get knowledge related tobusiness. I have made all department wise information like production,market, finance, etc.so I can apply it in practical also. This report is also very useful for students as prescribed bySaurashtra University. We have to prepare the product projectreport in the subject of “Entrepreneurship Management of SmallScale Industries”. By preparing this report students can apply theirknowledge and can get theoretical knowledge about managementof S.S.I. As it is a part of syllabus I have prepared the productproject report on Shampoo. 4
  • 5. ACKNOWLEDGEMENT Preparation of project report is necessary for me to know thepractical knowledge which is useful to establish our own unit.Some people have helped me in the preparation of this report. I am thankful to all those people who have helped medirectly or indirectly in the preparation of this report. I heartily thank Mr. Rajnikant who guided me in gettinginformation about shampoo. And I also thank Miss Kausha whoprovided necessary guidelines relating to the project. I am also thankful to my family members and friends fortheir valuable support. 5
  • 6. INDEXS.R. PARTICULARS PAGENo. No.01. Introduction. 802. Product at a Glance. 903. Implementation Schedule. 1004. Partners Background. 1105. Organizational Structure. 1306. Justification Of Location. 1407. Product Details. 1608. Raw Materials & its Sources. 1809. Manufacturing Process. 2110. Name and Address Of Raw Materials Suppliers. 1911. Name and Address Of Machinery Suppliers. 2312. Market Analysis. 2513. Competitors And Strategy Against Competitors. 2714. Sales Details. 2815. Financial Details. 2916. Fixed Assets. 3617. Profit Analysis. 3818. Break Even Point. 3919. Cost Analysis. 4020. P&L A/c And Balance Sheet. 4121. Staff & Labour. 4322. Risk Factor. 4423. Future Plans. 4524. Conclusion. 4625. Bibliography. 47 6
  • 7. INTRODUCTION Cottage and small scale industries have flourished in Indiasince the early times. Even today they are a principle source ofincome and employment. And their product find ready market inIndia as well as abroad. Small scale industries in India roughly provide employmentto about 4.4 million people and constitute a large position of the 7
  • 8. country’s exports. The Government of India is well aware of theimportance of small scale industries in our economy and growth ofsmall scale industry. All India Boards give technical, financial andother relevent guidance to small scale industries along with thebenefits and concessions. PROJECT AT A GLANCE In ‘Project at a Glance’ general information about the unitproducing the product named “SHAMPOO”. This information is given below: Name of the unit: - SKY Industries Pvt Ltd. Address: - GIDC Aji-2, 8
  • 9. OP Road, Rajkot (Gujarat) – 360 001 Type of unit: - Partnership Firm. License No: - Application has been made for obtaining. Small Scale Industry: - Application has been made for Register No. obtaining. Name of product: - Shampoo. Owner of unit: - Shyara Chandresh P. Vaghamshi Narendra N. Paradra Rakesh J. Brand name: - SKY Shampoo. IMPLEMENTATION SCHEDULE Here the timing of every activity is listed. The major activityand average time for it is estimated as under: 1. Preparation of project report - 1 month 2. Registration Formula - 1 month 3. Sanction of loan - 1 month 4. Plant & Machinery - 15 days 9
  • 10. 5. Procurement of raw material - 15 days6. Recruitment of Personnel - 1 month7. Trial Production - 2 month8. Commercial Production - 2 month9. Building Construction - 3 month PARTNERS BACKGROUND1st PartneName: - Shyara Chandresh R. “Shree Krishna”, Vaniya Vadi, Rajkot – 360 002 Mo: 99242 00147Age: - 25 years. 10
  • 11. Qualification: - M.B.A (with Adv. Marketing)Division of Responsibility: - Marketing and H.R.D Department.Capital Investment: - 40% (of owned capital)2nd PartnerName: - Vaghamsi Narendra N. “Krupa” Shiv Park – 1 150 ft Ring Road, Rajkot – 360 005. Mo: 98988 21974Age: - 30 yearsQualification: - M.E (chemical) (with 5 yrs experience)Division Responsibility: - Production and R&D Department.Capital Investment: - 30% (of owned capital)3rd Partner 11
  • 12. Name: - Paradra Rakesh J. “Shree Nivas” Kalavad Road, Rajkot – 360 002 Mo: 92281 11921Age: - 28 yearsQualification: - M.B.A (with finance)Division Responsibility: - Finance Department.Capital Investment: - 30% (of owned capital)ORGANIZATIONAL STRUCTURE 12
  • 13. JUSTIFICATION OF LOCATION Industry location is nothing but establishing an industry at aparticular place. 13
  • 14. Enough care should be taken for choosing location becauseonce a plant location is chosen, it can not be changed in near futureor if changed it may prove to be costlier. Following are factors affecting location:1) Raw Material: Nearness to source of raw material is an importantconsideration for most of the industries. If raw material getnearness transfer cost reduces. Raw materials needed for the preparation of Shampooi.e. detergent, water, milk, etc can be easily available near to themarket.2) Labor Supply: Availability of working force or labor is also anotherinfluencing factor for the location of industry. If skilled andunskilled workers meet easily that affect pricing. Aji – 2 GIDC is the area where we can get work forceeasily. There were skilled and unskilled workers both. So we caneasily get worker. 14
  • 15. 3) Proximity to Market: Proximity to market may affect the cost. If market isnear than transportation cost may decline. Market is near for shampoo so it may reduce cost oftransportation.4) Finance: The availability of finance at cheaper rate of interestand adequate amount is also affecting the industrial location. Near Aji – 2 there are many banks and financialinstitutes so we can get less interest amt and easily.5) Transport Facilities: Transport services are required for raw material supplyand distribution of the finished product to the consumer. There is a highway near to the location so transportservices are available easily.6) Services: 15
  • 16. Factors like value of service may affect the location,where all necessary or basic service are easily available and mayreduce cost. Near the area of the location services are available likewater, canteen facility, disposal of waste, etc... PRODUCT DETAILS A company can produce three different types of shampoo,with different features.(1) SKY Hair Fall Difference: - 16
  • 17. This shampoo is for those people who want less hairbreakage and fall of hairs and dandruff free healthy scalp and alsowith vitamins A, C and E. *Breakage and fall condition after 2 weeks Chart given below:(2) SKY Strong: - The use of this shampoo provides protection fromdandruff for people using it. It also makes the hairs stronger andlonger. It eliminates dandruff with every wash and containsvitamin A, C and E. 17
  • 18. *Dandruff reduction with every wash:(3) SKY Soft: - This shampoo contains amla, milk & proteins. It makeshair thicker, shiny and makes them soft & strong. 18
  • 19. RAW MATERIAL AND ITS SOURCES Raw material is the basic requirement for any productionunit. Final product has to be made by doing process on rawmaterial and then we get the ultimate product.*Following Raw Materials are required for the production of 19
  • 20. shampoo:(1) SKY Soft Shampoo: - Sodium Lauryl, Sulphate, Dimethicone, Zinc Pyrithione, GHTC Conditioner, Milk Proteins and Fragrance, Amla.(2) SKY hair fall defense Shampoo: - Climbazole, Sodium Laureth, Sulphate, Cocami- dopropyl, Betuin, Demethi- conol, Aqua.(3) SKY Strong Shampoo: - Sodium Lauryl, Sulphate, Dimethi- cone, Zinc Pyrithione, GHTC Conditioner, Menthol and Fragrance MANUFACTURING PROCESS 20
  • 21. 01. Large Batch Material Provide: - A large Batch of shampoo is made in drums. In this drum all the materials are mixed.02. Heat & Cooled Batch: - Batch of material has to be boiled at a certain level. After that the heated batch is then condensed/made cooled.03. Quality Check: - Physical verification is done to make sure the batch and color adjusted in shampoo. 21
  • 22. 04. Filing Line Bottle: - A bottle can be arranged in hopper. Empty bottles can be arranged in it.05. Delivery of Shampoo: - A machine in which empty bottles are arranged rotates and shampoo falls in it.06. Labeling: - An automatic machine is used for labeling the bottles and for packing.07. Boxing: - After labeling the bottles are either as per no of pieces or in dozens into the boxes. NAME AND ADDRESS OF SUPPLIERS OR RAW MATERIALS 22
  • 23. 1. M/s Dharmendra Chemicals, 4 – Jodhpur Main Road, Ahmedabad.2. Ankur Water Suppliers, Aji – 2, Rajkot.3. Amit Detregent, Bopal Bhuma, Near Iskon Temple, Ahmedabad. NAME AND ADDRESS OF MACHINERY SUPPLIERS 23
  • 24. 01. Hiren Engineering Works, 2 – Govt. Industrial Estate, Mumbai.02. Ashok Machine Tools, Krishna Main Road, GIDC – 2, Bangalore. MARKET ANALYSIS 24
  • 25. Present modern market is more important and complex. Inpast the producers used to produce and sell the products as pertheir will but in the present market condition the producer has toproduce the goods keeping in mind the desire of the consumers.They have to provide the consumers, goods which are of betterquality, reasonable price and which are easily availableeverywhere. We try to achieve more market share and for that followingpoints are to be given more importance:01] Quality: - Our first and main emphasize is on quality. If we want to fight against the competitors then we would have to provide even better quality then our competitors. By doing so we can capture more share in the market.02] Price: - Price of shampoo is reasonable. Because our target market is upper, middle and lower class as shampoo is used in day to day life.03] Advertising: - Advertising is important for any product. If we have to make consumer about the product then the most effective way is the advertising. We are doing advertising 25
  • 26. with T.V. and through retailers by providing them posters.04] Distribution Channel: - A distribution channel is the intermediary of manufacturer to producer. A shampoo is used in day to day life, so we have to choose channel by which consumer can get our product easily. We have chosen as give below in the chart: COMPETITOR AND COMPETITOR STRATEGY 26
  • 27. In the production of shampoo there may be made manychanges in its features as per the producers wish. So we have tokeep watch on competitor to know when they introduce newshampoo with new features and design. To fight against competitors our strategy is that we try toimprove our product with new features by adding new ingredientslike chandan, other vitamins, neem, tulsi, aritha, and other thingswhich are good for the health of the hair and which make hairstrong, long, soft, shiny and SKY. The competitors of our company are mostly brandedmanufacturers. They are listed as follows:  Lux  Clinic All Clear  Head & Shoulders  Clinic Plus SALES DETAILS 27
  • 28. Our sales target of selling shampoo is 22, 40,000 withbeginning because shampoo is used in day to day life so we cansale more.*Following are the Sales Details of Shampoo:Sr Particulars Size Sales Selling Total Rs.No. (ml) Quota Price (pieces)01. SKY Hair Fall 5 ml 6,00,000 2 12,00,000 40 ml 80,000 10 8,00,000 Defense 150 ml 40,000 30 12,00,000 Shampoo02. SKY Strong 5 ml 4,00,000 3 12,00,000 40 ml 90,000 12 10,80,000 150 ml 50,000 35 17,50,000 5 ml 8,00,000 1 8,00,000 40 ml 1,00,000 10 10,00,000 150 ml 80,000 25 20,00,000 Total 22,40,000 1,10,30,000FINANCIAL DETAILS*Raw Material Requirement: Item Qty. Rate Monthly 3 months AnnuallySodium Laury 5000 40 2,00,000 6,00,000 24,00,000 Sulphate 5000 20 1,00,000 3,00,000 12,00,000 Dimethicone 2000 18 36,000 1,08,000 4,32,000 28
  • 29. Zinc 2000 10 20,000 60,000 2,40,000 GHTC 1500 10 15,000 45,000 1,80,000 Conditioner.Milk Potentials 2000ltr 20 40,000 1,20,000 4,80,000 Amla 1000kgs 15 15,000 45,000 1,80,000 Fragrance 1000 20 20,000 60,000 2,40,000 Cuimbazole 1200 12 14,400 43,200 1,72,800 Betalin 800 18 14,400 43,200 1,72,800Cocamidopropy 1000 10 10,000 30,000 1,20,000 Total 4,84,800 14,54,40 58,17,600 0*Utilities: Sr. Particulars Monthly 3 months AnnuallyNo.01. Electricity 2000 6000 2400002. Water 25000 75000 300000 Total 27000 81000 324000*Man Power Requirements:Sr. Particulars No. of Monthly 3 months AnnualNo. Employees Salary Salary Salary01. Manager 1 10,000 30,000 1,20,00002. Accountant 1 8,000 24,000 96,00003. Engineer 1 10,000 30,000 1,20,000 Total 28,000 84,000 3,36,000*Middle Level: 29
  • 30. Sr. Particulars No. of Monthly 3 months AnnualNo. Workers Salary Salary Salary01. Store keeper 1 5,000 15,000 60,00002. Clerk 1 4,000 12,000 48,00003. Supervisor 1 8,000 24,000 96,000 Total 17,000 51,000 2,04,000*Lower Level:Sr. Post No. Of Monthly Total 3 Month Annualno. Workers Monthly Salary Salary01. Batch 10 3000 30,000 90,000 3,60,000 Operator02. Heat & 4 2500 10,000 30,000 1,20,000 Cool Operator03. Quality 2 2500 5000 15,000 60,000 Checker04. More 1 3000 3000 9000 36,000 Operator05. Labeler 1 3000 3000 9000 36,00006. Watchman 2 2500 5000 15,000 60,00007. Office 2 3000 6000 18,000 72,000 Boy Total 62,000 1,86,00 7,44,000 0*Levels of Management: 30
  • 31. Levels of Management Total Total 3 Total Monthly Months Annual Salary Salary Salary Top Level 28,000 84,000 3,36,000 Middle Level 17,000 51,000 2,04,000 Lower Level 62,000 1,86,000 7,44,000 Total 1,07,000 3,21,000 12,84,000*Other Administrative Expenses:Sr. Particulars Monthly 3 Months AnnualNo. Salary Salary Salary01. Telephone 2000 6000 24,00002. Postage Stationery 500 1500 600003. Adv. & Marketing 5000 15,000 60,00004. Stores 1000 3000 12,00005. Miscellaneous 500 1500 6000 Total 9000 27,000 1,08,000*Total Working Capital:Sr. Particulars Monthly 3 Months AnnualNo. Salary Salary Salary01. Raw Material 4,84,800 14,54,400 58,17,60002. Utilities 27,000 81,000 3,24,00003. Wage &Salary 1,07,000 32,000 12,84,00004. Administrative Exp. 9000 27,000 1,08,000 Total 6,27,800 18,83,400 75,33,600 31
  • 32. *Total Cost of Project:Sr. Particulars Amount (Rs.)No.01. Total Fixed Capital 42,00,00002. Total Working Capital 75,33,600 Total 1,17,33,600* Cost of Production:Sr. Particulars Amount (Rs.)No.01. Raw Materials 58,77,60002. Utilities 3,24,00003. Man Power 12,84,00004. Repair & Maintenance 1,83,750 Total 76,69,350*Source of Fund: 32
  • 33. Sr. Particulars Percentage Amount (Rs.)No (%) .01. Owned Capital 60% 58,16,160 Mr. Chandresh Shyara 40% (23,26,464) Mr. Narendra Vaghamshi 30% (17,44,848) Mr. Rakesh Paradra 30% (17,44,848)02. Borrowed Capital 40% 38,77,440 Total 100% 96,93,600*Interest:Sr. Particulars Capital Percentage AmountNo. Amount (%) (Rs.)01. Owned Capital 58,16,160 10% 5,81,61602. Borrowed Capital 38,77,440 12.5% 4,84,680 Total 96,93,600 10,66,296*Depreciation:Sr. Particulars Value Rate (%) AmountNo.01. Building 17,50,000 12% 2,10,00002. Machinery 10,25,000 15% 1,53,750 33
  • 34. 03. Other Fixed Assets 9,00,000 10% 90,000 Total 4,53,750*Maintenance & Repairs:Sr. Particulars Value Rate (%) AmountNo. (Rs.)01. Building 17,50,000 5% 87,50002. Machinery 10,25,000 5% 51,25003. Other Fixed Assets 9,00,000 5% 45,000 Total 1,83,750 FIXED ASSETS*Details of Land and Building: Sr Particulars Area Rate totalNo.01. Land 3000 yards 250 7,50,00002. Building 2500 sq.ft. 400 10,00,000 Total 17,50,000 34
  • 35. *Detail of Plant and Machinery: Sr Particulars Amount. (Rs.)No.01. Drum 5,00,00002. Heat – Cool Machine 1,00,00003. Arrange Machine 50,00004. Delivery Machine 1,50,00005. Move Machine 1,80,00006. Labeling 75,000 Total 10,25,000*Other Fixed Assets: Sr Particulars Amount. (Rs.)No.01. Delivery Rickshaw &Van 6,00,00002. Furniture 3,00,000 Total 9,00,000*Total Fixed Assets: Sr Particulars Amount. (Rs.)No.01. Land & Building 17,50,00002. Plant &Machinery 10,25,00003. Other Fixed Expense 9,00,000 35
  • 36. 04. Preliminary Expenses 5,25,000 Total 42,00,000 PROFITABILITY ANALYSIS 36
  • 37. BREAK EVEN ANALYSISSr. Particulars AmountNo.01. Sales 1,10,30,00002. Variable Cost 72,09,60003. Fixed Cost 21,77,796Profit Volume Ratio = Sales 37
  • 38. COST ANALYSIS 38
  • 39. Profit&Loss Account 1st April 2011 to 31st March 2012 Particulars Amount Particulars AmountPurchase Account Sales 1,10,30,000Purchase 57,17,600Direct ExpensesElectricity Expense 24,000Water Expense 3,00,000Indirect ExpensesAdvertisement 60,000Consumer Stores 12,000Insurance Expense 20,000Interest to Bank 4,85,000Interest to Partner 5,81,616Machinery & 1,83,750RepairingMisc. Expenses 6,000Office Salary 2,04,000Other Contingency 5,25,000Post & Stamp 6,000Preliminary 5,25,000ExpenseTelephone Expense 24,000 Net Profit 23,56,034 1,10,30,000 1,10,30,000 39
  • 40. Balance Sheet as on31st March 2007 Liabilities Amount Assets AmountCapital Assets Fixed AssetsChandresh Shyara 23,26,464 Building 17,50,000Narendra Vaghamshi 17,44,848 Land 10,25,000Rakesh Paradva 17,44,848 Other Assets 9,00,000 58,16,160 36,75,000Loan Liabilities Current AssetsBank Loan Sundry Debtor 28,00,000ICICI Bank 9,40,000 Cash in Hand 20,55,000HDFC Bank 9,40,000 Bank Balance 25,00,000 Net Profit 33,33,840 1,10,30,000 1,10,30,000 STAFF & LABOUR This unit gives employment to several people. It requirescertain people who can run the production, financial and otheraspect of the firm without interruption. List of staff members and laborers is given below: 40
  • 41. RISK FACTORCompetition: - There is the risk of great competition in today’s. World offast pace, because there are many competitors all over the market.To sustain in this cut-throat competition the better way out is toprovide better quality goods at reasonable price. This is the most 41
  • 42. efficient way to stay stagnant in the market. By doing so risk ofcompetition becomes less.Lack of Consumer: - we have started producing new product in the market soconsumers are not aware for products but to avoid this risk wehave to do more advertising and communication in an effectiveway. FUTURE PLANS Future plan is advance thinking of future activity. Each andevery company wants to have bright future and they try to dobetter activity in future and thus result in the growth of theindustry.01. We want to launch a new shampoo with better quality and new features. 42
  • 43. 02. We want to start selling our product in the other countries.03. We want to produce new products like soap, oil etc… CONCLUSION Shampoo is used in day to day life. In past years people usedsoap to wash their hair, but now the use of shampoo has beenincredibly increased. Even in small villages people have startedusing shampoo. 43
  • 44. Today there are different features in shampoo and demandhas also increased. Different features like with amla, vitamins,chandan, etc. and in future also there will be a variety of featuresadded in shampoo. In future there will be increase in demand andthe companies will get wider spread market. BIBLIOGRAPHY Entrepreneurship – VASANT DESAI. 44
  • 45. 45