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Honey ppr

  1. 1. A BUSINESS PLAN ONPREPARED BY : GOHEL AJAY J.CLASS : M.B.A. -IIIROLL NO. : 24ACADEMIC YEAR : 2009-2011COLLEGE : N.R.VEKARIA INSTITUTE OF BUSINESS MANAGEMENT STUDIES, JUNAGADHSUBMITTED TO : DR. PROF. RAJESH PATEL 1
  2. 2. DECLARATION I, the undersigned GOHEL AJAY J.student of NRVIBMS-JUNAGADH of M.B.A.declare that the project work presented inthis report is my own work and has beencarried out at my own efforts.Date :Place : Student Signature GOHEL AJAY J. 2
  3. 3. PREFACE “Knowledge is an ocean that cannot befathomed – the deeper you go, the more yousee its unbounded profundity yet, in thecompetitive world of today. It is veryessential for young entrepreneurs to havethe basic knowledge about how SSI can bestarted and which type of plan is to besubmitted to the bank or other financialinstitution for the purpose of loan becauseSSI plays a vital role in promoting theeconomic condition which aids in raising thetotal national income. 3
  4. 4. INDEXSr. Particulars PageNo. No. 1. Introduction 7 2. Project at glance 8 3. Partners Background 9 4. Justification of location 11 5. Product detail 13 6. Details of Raw materials 14 7. Details of Suppliers 15 8. Manufacturing Process 16 9. Staff and Labor 1810. Administrative work 1911. Implementation of schedule 2012. Utilities and Expenses 2113. Financial details 2214. Capital Investment 2315. Break Even Point 2516. Fixed Assets 2617. Cost of Production 2918. Profitability 3019. Details of Sales 3120. Ratio Analysis 3221. Use of Application 3322. Capacity of Utilization 3423. Basis and Presumption 3524. Marketing Analysis 3625. Market Strategies 3826. Competitors 3927. Risk Factors 40 4
  5. 5. 28. Future Prospects 41 29. Bibliography 42 INTRODUCTION The small scale industry has emergedas the most dynamic sector of Indianindustrial economy accounting for ever 55%of the total value of industrial productionover 40% of the country’s exports & moreimportantly providing employment 5
  6. 6. opportunities to over 175 lac people in 3175units. All along it has shown the growingspirit of entrepreneurship. In other words, small business is theopen university for entrepreneurs totranslate their vision innovative ideas intoreality. It is thus the seed ofentrepreneurial dreams. This report is intended to set forthproject that has been undertaken by Dhruventerprise, so that its nature beunderstood, its projected operationcomprehend & its feasibility. This projectcontain project bearing the profitability ofthe venture & its worthiness. It alsointroduces gives personified data of themanufacturers with brief history of all thepartners firm with location & locationaladvantages with prima-facie facts of theproduct & project. Dhruv enterprise propose to set up ahoney mfg. plant with production capacity of75000 bottles p.a. at district Isanpur inAhmedabad. 6
  7. 7. PROJECT AT A GLANCEName of the unit : Dhruv EnterpriseAddress : Dhruv enterprise, 6/7, Rollan Estate, Isanpur, Ahmedabad,Registered office : 104, silver Ask, Nr. Malaviya Petrol Pump Gondal Road, Rajkot : 360002Form of organization : PartnershipSize of the unit : SSIPartners : 1)Gohel Ajay J. 2)Maradiya Samir 3)Kothari Amit B.Name of product : Honey 7
  8. 8. PARTNER’S BACKGROUND • Partner 1 :Name : Gohel Ajay J.Address : Near Mayani Chawk, B/d Back Bone S.C., “PUNYA BHUMI”, Rajkot – 360004,Age : 22 yearsEducation Qualification : M.B.A persuing (Mktg.)Experience : In Krishna Enterprise – 2yrs.Income : Rs. 20,000Financial contribution : 40%Responsibility : Mktg. & personnel 8
  9. 9. • Partner 2 :Name : Maradiya SamirAddress : Mehul Nagar, Nr Nilkanth Complex, RajkotAge : 28 yearsEducation Qualification: C.A.Experience :Options Pvt.Ltd. 4 yrs.Income : Rs. 30,000Financial contribution : 30%Responsibility : Accounting & finance dept. 9
  10. 10. • Partner 3 :Name : Kothari Amit B.Address : “Girja Niwas”, Amin Marg, Tagore Nagar, Behind star Appartment, RajkotAge : 32 yearsEducation Qualification : B.Sc, M.Sc(Chemical Eng.)Experience : Dabur Foods Pvt. Ltd–15yrs.Income : Rs. 40,000Financial contribution : 30%Responsibility : Production & Finance 10
  11. 11. JUSTIFICATION OF LOCATION The chief object of any industrialconcern is to maximize the profit throughthe minimization of cost of production. Thisobject can be achieved when the ideallocation is very important because itaffects the profitability of the concern. Hence keeping all the above aspects,the ideal & suitable location for honeyprocessing is selected. The plant is locatedunder the name, Dhruv enterprise, 6/7 RollanEstate, Isanpur, Ahmedabad. This location is selected, keeping inmind all the essential factors affecting thelocation. i.e. transportation cost, rawmaterials, competitors & other technologicalfactors. 11
  12. 12. • Location is also selected by considering all this, below mentioned factors1.Honey house is located in Rollan Estate, Isanpur, Ahmedabad, near a major highway that will encourage backdoor sales.2.It is located in the above mentioned area, as it contains abundant nectar sources.3.The location is also selected, by researching the mkt. & searching the mkt. i.e. it includes information about customers & their location also. 12
  13. 13. PRODUCT DETAILS Honey is one of the most ancient ofall ingredients known to humankind & yet itis perfect for a modern day people. Honey isdefined as an aromatic, visions materialmade from the nectars of flowers through thecollection of honey-bees. Bees may travel asfar as 55,000 miles & visit more to make aproud of honey. The colour & flavour of honey differdepending on the bees nectar source. In factthere are more than 300 unique kinds ofhoney. In general, loghter coloured honeysare mild in flavour, while darder honeys areusually more robust in flavour. Honey is primarily composed of“Fructose”, “Glucose”, & “Water”. It alsocontains sugar as well as trace enzymes,minerals, vitamins & amino acids. It hascurative properties Aristotle, the father ofnatural science said, “Honey improves health& prolongs life”. Honey’s composition is as follows :Moisture - 20% Minerals - 0.2% 13
  14. 14. Protein - 0.3% Carbohydrates - 79.5% Thus, honey is one of the finestsources of heat & energy – mainly due to thehigh carbohydrate content. 14
  15. 15. DETAILS OF RAW MATERIAL Raw Materials are the biggest assetof any mfg. unit. It gives proper form orfigure to the product and thus makes thefinished product. Raw Materials needed for honey makingare as follows : 1.Crude honey 5.05 MT (0.01% wastage) 2.500 g.m. bottles with cap. 3.Cartons, strap etc. for packaging. • Raw Materials Sr. Particular Qty Rate Rs. No. 1. Crude Honey 5050 65 3,28,250 mt 2. 500 g.m. 10,000 5 50,000 bottle with cap, label etc. 3. Cartons, scrap 500 12 6,000 etc. Total 3,84,250 15
  16. 16. DETAILS OF SUPPLIERSNAME OF SUPPLIERS PRODUCTAmrut Milks, Metoda MilkJigar Agencies, Rajkot CreamArifbhai Hussainbhai, Rajkot MeatAzimbhai Altafbhai, Veraval Bondless cod fishS. S. Khantawkar, Vanthali OrangesArifbhai Hussainbhai, Rajkot Eggs 16
  17. 17. MANUFACTURING PROCESS 1.Bee – keeping : Three species of honey bees, namelyApes dorsa, Apes flora and Apes indiciawhich are available in India are used forhoney comb. In India, various sizes ofwooden frames which are movable, are in usefor honey comb. These are of standard sizes.They are placed in lonely places like junglewhere movement of men, animal etc. isminimum. To each box, a honey spice isproved which collects more bees. All thesebees fill the cells of honey comb, arehermetically sealed by capping with wax.Before such combs are placed in honeyextractor, these capping are removed withthe help of an uncapping knife. Theextractor should be worked slowly in thebeginning at about 150 RPM (revolution perminute) for about 2 minutes. Then the sideof the frame should be reserved & theextractor again worked for the sameduration. The extractor should be emptiedinto astern when its honey chamber is 2/3rd 17
  18. 18. full. It is advisable to make arrangementfor straining & packing honey into thispromptly to obviate a need of subsequentheating of he produce. Freshly extractedhoney is warm & easy to stain. 18
  19. 19. 2.Honey processing : Crude honey may contain someimpurities such as wax, pollen, parts of thebees, dirt etc. Hence it is to be processedto make it more presentable. Crude honey istransferred to a jacketed tin or kettlewhere water will circulate between jacketedportion. The tin is placed on a fire/storeto heat the water. Honey is stirredcontinuously & temperature not allowed toraise about 41oC over heating damages thearoma flavour & colour of honey. Besides beewax in the honey melts at 60oC to 62.8oC andblock the strainer. The hot honey should bepassed through the strainer. It is allowedto settle. Before packing of the scum(impurely waste matter on the surface of awax) of wax is removed with a knife and thenhoney is packed in cans or in glass bottles. 19
  20. 20. STAFF AND LABOURSr. Particular/Designation No Salary TotalNo. Rs 1. Chemist 1 5,000 5,0002. Skilled worker 2 2,500 5,0003. Unskilled worker 6 1,500 9,000 Total Salary (1 + 2) 40,500 Perquisites @ 15% of 6,075 salaries Total 46,575 20
  21. 21. ADMINISTRATIVE WORKSr. Particular/Designation No. Salary TotalNo. Rs. 1. Manager 1 10,000 10,0002. Accountant/Salesman 1 5,000 5,0003. Clerk-cum-storekeeper 1 3,500 3,5004. Peon-cum-watchman 2 1,500 3,000 Total 21,500 21
  22. 22. IMPLEMENTATION OF SCHEDULE The time required for completing eachactivity of the project will be as follows : Sr. Particulars Time No. Duration 1. Preparation of project 1 month report 2. Registration & other 1½ month formalities 3. Selection of site ½ month 4. Arrangement of land ½ month 5. Selection of machinery ½ month 6. Approval of loan by 2 month financial institute 7. Placement of orders for ½ month machines 8. Procurement of machinery 2 month 9. Getting of honey from 2½ month bees 10. Trial & commercial 1 month production. Total Time Required 12 months UTILITIES AND EXPENSES • Utilities 22
  23. 23. Sr. Particulars Amount No. 1. Power 3,500 2. Water 1,500 Total 5,000 • Other contingent expenses Sr. Particulars Amount No. 1. Land & Building rent - 2. Postage & Stationary 500 3. Telephone 2,500 4. Transportation charges 3,000 5. Advertisement & Publicity 10,000 6. Miscellaneous expenses 2,000 Total 18,000 FINANCIAL DETAILS• SOURCES OF FINANCE 23
  24. 24. Sr Particular Owned Commer Co- Total. s 35% cial operatno bank ive . 25% 40%1. Land, 7,00,00 5,00,0 8,00,0 20,00, Building 0 00 00 000 and furniture2. Machinery 3,98,23 2,34,4 455120 11,37, & 0 50 800 Equipment3. Working 4,76,51 3,40,3 344590 13,61, capital 6 69 475 Total 15,74,7 11,24, 17,99, 44,99, 45 819 710 275 24
  25. 25. • DEPRECIATIONSr. Particular Value Rate AmtNo. of dept. 1. Land 10,00,000 10% 1,00,000 2. Building 5,00,000 10% 50,000 3. Furniture 5,00,000 10% 50,000 4. Machinery & 11,37,800 15% 1,70,670 Equipment Total 3,70,670 25
  26. 26. CAPITAL INVESTMENT • TOTAL CAPITAL INVESTMENT a.Statement showing the total capital investment. Sr. Particulars Amount No. 1. Fixed capital total 31,37,800 2. Total working capital 13,61,475 (3months) Total 44,99,275 • WORKING CAPITAL DETAILS A.Statement showing total working capital requirement.Sr. Particulars AmountNo. 1. Raw Materials 3,84,2502. Salaries 46,5753. Utilities 5,0004. Other contingent expenses 18,000 W.C. for 1 month 4,53,825 Total working capital for 13,61,475 3 months • INTEREST ON CAPITAL 26
  27. 27. Sr. Particulars Total Amt.(Rs)No. value1. Owned (10%) 15,74,746 1,57,4752. Commercial Bank 11,24,819 1,42,6023. Cooperative (13%) 17,99,710 2,33,962 Total 44,99,275 5,34,039 27
  28. 28. BREAK EVEN POINTSr. Particulars AmountNo. 1. Int. on total investment 5,32,0392. Total Depreciation 3,70,6703. 40% salary & wages 2,23,5604. 40% of other contingent 35,400 expenses Total 11,61,669 Calculation of break even point BEP = Fixed cost x 100 Fixed cost + profit = 31,37,800 x 100 31,37,800 + 8,90,079 = 31,37,80,000 4027879 BEP = 77.90 % 28
  29. 29. FIXED ASSETSA. Land, Building, Furniture Sr. Particulars Rs. No. 1. Land : 500 sq. meter @ Rs. 10,00,000 2000 per sq meter 2. Building : 200 sq. meter @ 5,00,000 Rs. 2500 per sq. meter. 3. Furniture 5,00,000 Total 20,00,000 29
  30. 30. B. Machinery & EquipmentSr. Particulars Qty Rate AmountNo. A. Bee-keeping unit (500 colonies) 1. Bee hives 500 800 4,00,000 2. Bee colonies 500 500 2,50,000 3. Hives stand 500 150 75,000 wooden 4. Feeding pots 500 10 5,000 5. Comb foundation 3,500 10 35,000 6. Crude honey 2 5,000 10,000 extractor 7. Migration cards 500 100 50,000 B. Honey processing unit 1. Honey strainer 2 2,000 2. Honey processing 1 15,000 plant with electric heating & control system 3. Cap sealing 1 20,000 machine 4. Laboratory 18,000 equipments electricity over refractrometer etc. 30
  31. 31. 5. Weigh scale- 16,000 capacity 100 kg. 6. Table weighing 2,000 scale 10 kg. capacity 8,98,000 Electrification 89,800 &Installa- tioncharges@10% 7. Office 1,50,000 furniture, tools etc Total 11,37,800C. Statement showing total fixed cost Sr. Particulars Amount No. 1. Land 10,00,000 2. Building 5,00,000 31
  32. 32. 3. Furniture 5,00,000 4. Machinery & equipments 11,37,800 Total Amt. 31,37,800 COST OF PRODUCTION• Statement showing the cost of productions 32
  33. 33. Sr. Particulars AmountNo.1. Total Recurring cost 54,45,900 (per year)2. Total Depreciation 3,70,6703. Interest on total 5,32,039 capital investment Total 63,48,609 PROFITABILITY 33
  34. 34. Sr. Particulars AmountNo.1. Sales 82,50,0002. Less : Cost of Production 63,48,6093. PBT (Profit before tax) 19,01,3914. Less : interest on 5,32,039 capital5. PBIT 13,69,3526. Less : Income tax @ 35% 4,79,2737. PAIT (Profit after 8,90,079 interest & tax) 34
  35. 35. DETAILS OF SALES• SALES TURNOVERSr. No. Particular Qty Rate Amt 1. 75000 honey 500 gm 110 82,50,000 bottles of 500 gm each @ Rs. 110 each. Total 82,50,000 35
  36. 36. • PROJECTION OF SALES Statement showing sales for the next 5 years,Sr. Particular Year No s 1 60% 2 70% 3 85% 4 100% 5 100%. 1 Qty. sold 6250 7292 8854 10417 10417 (p.m.) 2 Qty. sold 75000 87500 106250 125000 125000 (p.a.) 3 Sales 110 110 110 110 110 price 4 Total 8250000 9625000 11687500 13750000 13750000 sales Value 36
  37. 37. RATIO ANALYSIS1.Rate of return : = Net profit per year x 100 Cost of Projection = 8,90,079 x 100 44,99,275 = 19.8%2.Net Profit Ratio : = Net profit per year x 100 Sales per year = 8,90,079 x 100 82,50,000 = 10.79% 37
  38. 38. USE OF APPLICATION In the ancient Egypt & Greece, honeywas used as an all purpose medicine.  In an average Indian home. Honey is used in tea, coffee, milk or butter milk in place of sugar for an attractive & delicate flavor.  As it provides energy in a readily available form, honey is largely taken by athletes after hard exercise or long races to regain lost energy.  Honey acts as an anti-septic ointment. So it can be applied on cuts, burns & wounds to give shooting effect.  Honey prevents tooth decay & early falling of the teeth. It can also be used for any type of mouth ulcer.  Honey-lemon juice mixture will give relief from cough & cold. 38
  39. 39.  Honey is useful for anemic patients as it builds hemoglobin in the body. It will cure constipation & acidity. In allopathic science also, honey is used. Generally we use honey as food, but now it will enter in operation theatres also to cure the cancer patients. Thus, it acts as an antibiotic without any harmful effects. 39
  40. 40. CAPICITY UTILIZATION The total production capacity perannum is as follows : 1) Quantity : 60 MTs [1,25,000 bottles of 500gm] But in the first year only 60% ofcapacity is utilized i.e. 75000 bottled. Thefull capacity is utilized in the next 34years, only to cover up all the costsinvolved or utilized in the unit. Year Production Capacity capacity utilization 1 75,000 60% 2 87,500 70% 3 1,06,250 85% 4 1,25,000 100% 5 1,25,000 100% 40
  41. 41. BASIS AND PRESUMPTION1.The cost of land is based on the prevailing rates at Isanpur, Ahmedbad in the prevailing year 2004 – 05.2.The cost of contracting build & factory shed are according to the prevalent rates in Ahmedabad city.3.The depreciation rates of Machinery, land & Build and furniture are fixed as per government specifications.4.The interest rates are taken at the prevailing mkt. rates.5.The salary & wages have been decided on the basis of local mkt. 41
  42. 42. MARKET ANALYSIS Honey is a consumable item. It isused in making of various medicines in thecountry. There exits a very good demand forthe product throughout the country & hencemktg. may not be a problem. Through honey is the most ancientingredient known to humankind, it is yetfavored excessively. The reason is “Peopleare looking for new things, but familiar atthe same time. The key is to offer afamiliar product/flavor is with a twist”. 200 gm. of honey equals.  1.135 kg. of milk [OR]  1.658 kg. of cream [OR]  340 gm. of meat [OR]  425 gm. of bondless cod fish [OR]  8 oranges [OR]  10 eggs. 42
  43. 43. Honey is the ideal sweetener forhealth conscious people. Effective honeymktg. requires more than just hanging up asign. It is used as a medicine as lactose inthe form of carrier of almost allhomeopathic medicines. Nutritive components/contents : • Calcium : 5 mg • Iron : 0.9 mg • Phosphorus : 16 mg • Vitamin C : 4 mg. And small amount of vitamin B complex. September is celebrated as “NationalHoney Month”. Due to the various uses &components of honey, there exists a verygood demand for it, throughout the country.Thus, we can conclude that the mkt. forhoney is very wide is easily retainable. 43
  44. 44. MARKETING STRATEGIES To compete with competitors in themarket every firm needs to use somemarketing strategies to convince thecustomers and to switch over them from onebrand to another brand. Therefore, this firmwill use the following marketing strategiesto make people aware about its product’s andto convince them to try it once and forpurchasing it again and again.1) Initially the firm will take part in different festivex and fun fairs and gives samples of product of very small amount for trying it.2) Then firm will give offer like on the purchase of four packs of any size one pack of customers choice of same size will be given free.3) The firm will approach each and every provision store and hotel of Rajkot and try to convince them to purchase the honey of its firm. 44
  45. 45. COMPETITORS “Poor firms ignore theircompetitors; average firms copytheir competitors; winning firmslead their competitors.” Today in this competitive world ZEALHoney has got many competitors which are asfollows: - Jigar Honey – Rajkot. Mahesh Industries – Rajkot. 45
  46. 46. RISK FACTORS When an industry is started there aremany advantages along with its risk factors.Certain risk factors which arise are asunder:  Company will operate in highly competitive with existing and proposed unit so that to stand among all competitors is difficult and sometimes risky.  Bank finance is limited so expansion chances get minimized. In very first year the productionmight be less than expected due to neworganization and other so many factors. 46
  47. 47. FUTURE PROSPECTSThe future plans of the firms are asfollows. 1. The firms plan to produces more and more varieties of honey which are not at presently even available also in the market. 2. The firm will export its honey. 3. Expansion in the Market and Distribution areas. 4. Enhancement, in the Installed capacity of the unit. 5. Increase in the range of products i.e. Quality, Taste, Flavors and Packing Method. 6. Participation in the National and Inter National tread fairs. 47

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