Product project


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Product project

  1. 1. Declaration I undersign kachhadiya Rajan J. The student of M.B.A. here NR vekaria institute of b.m.s.junagadh. Here by declare that the Business plan presented in this report is my own work and has been carried out under the supervision for dr.rajesh patel of NR.vekaria institute of b.m.s bilkha road junagadh. This work has not been previously submitted for any examination to any other university.Date :- Student’s Sign (kachhadiya Rajan J.)Place :-
  2. 2. PREFACE Small scale industry is a tool for socio-economic growth andbalanced structural development. It is considered highly important forcreating employment opportunity and to develop entrepreneur skills. Italso ensures latter use of scare financial resources and opportunitytechnology. The contribution of small scale industries is 40% in theeconomic growth rate of the country. So, it is essential to understandmanagement and working of small scale industries as a student ofmanagement. Small scale business has been included to create anddevelopment entrepreneur skill among the student. It is highly essential as a student of management to understandmanagement of SSI in MBA The subject entrepreneurship andmanagement of small business are included to give student thepractical knowledge of the student. Thus we can get clear picture that how to manage small scalebusiness and how to avoid difficulties in the way. So, I am presentingBusiness plan on “cotton seed industry”.
  3. 3. Acknowledgement I am feeling great pleasure in submitting this project report to you.Business Plan is crucial function, which must be done by every smallscale entrepreneur before he or she starts production. I greatly pay my attitude to my supervisor Dr. Rajesh Patel for hisguideline encouragement. I would like to thank my friends and my family members whohelped me in this project.Date :- Student’s Sign (Kachhadiya Rajan J.)Place :-Junagadh
  4. 4. IndexSr.No. Particulars Page No. 1. Introduction 2. Project at a Glance 3. Bio-data of Promoter 4. Basis and Presumption 5. Organization structure 6. Implementation schedule 7. Location Justification 8. Introduction of Product 9. Market details of Product 10. Details of Raw – Material 11. Details of Machinery & Equipments 12. Production Process 13. Details of Marketing 14. Financial Details 15. Profitability of Project 16. Ratio Analysis 17. Break Even Point Analysis 18. Risk Factors 19. Future Plan 20. Conclusion
  5. 5. 1 Introduction of small small scale industry Cottage & Small scale industries facilities in effectivemobilization of resources of capital and skills proper management ofsmall scale industries leads to maximum utilization of scatteredresources and developing entrepreneur skills Small scale industry in India provides employment to above 4.4million people and the large contribute to develop Indian economy.The government of India is well aware about importance of small scaleindustry.all India small scale boards give technical financial and otherguidance to small scale industrialist. I have got a chance to acquire practical knowledge at the time ofcollecting information. I have tried to cover all the relevant points andhave tried to give in the most precise and systematic form.
  6. 6. 2 Projects at Glance1. Name of the Unit :- Shree Krishna industry2. Address of Unit :- road B/5 Plot no. E-10/B G.I.D.C Metoda3. Form of Organization :- Partnership firm4. Name of the Product :- “Cotton seed cake”5. SSI Registration :- Applied for6. Bankers :- HDFC Bank ICICI Bank7. No. of Proposed Employees:- 128. Cost of Project :- 1,17,75,0009. Brand Name :- “Anmol cotton seed cake”10. Accounting Year :- 1st April to 31st March
  7. 7. 3 Bio-Data of Partners Partner:-11) Name :- Kachhadiya Rajan J. Address :- kuldevi krupa B-5 sahi strit Kalavad Road, TA- Rajkot DR- Rajkot Rajkot Age :- 22 Education Qualification : - M.B.A. (Finance) Financial Contribution :- 60% Share In Profit :- 60% Working Responsibility : - In Production & Marketing Department
  8. 8. Partner:-2 Name :- Ranpariya Rohit Address :- “Shree Krishna” 9-Patidar Society University Road, Street No.1, Rajkot. Age :- 26 Education Qualification : - M.B.A. (Finance.) Experience :- 3 Years in Company Financial Contribution :- 40% Share In Profit :- 40% Working Responsibility : - In Finance & Personal Department
  9. 9. 4 Basis & Presumption The profile is drawn on the basis of the following presumption.Working hours per day 20 HrsWorking day 300 DaysTotal no. of working hours 6000 HrsWorking efficiency 80%Labors charges As per wage actRate of interest on fixed and working capital 16%Operative period of the project 12 yearsValue of machinery and equipments is estimated on the basis ofprevailing cost of market.
  10. 10. 5. Orgenation structure PartnerGeneral Marketing SalesManager Manager Manager Labour Clark Aria Manager
  11. 11. 6 Implementation ScheduleProject implementation will take a period of 10 months from the dateof approved of the scheme breakup of activities with relative time foreach activity is shown below.Preparation of project report 1 monthRegistration of SSI 1 weekFinancial arrangement 1 monthPurchase of raw-material 15 monthInstallment of machinery 1 monthElectrification 1 weekRecruitment of staff 15 days I can start my business with maximum time period of 8 to 12 month.
  12. 12. 7 Location JustificationIt is very essential that selection of location should be proper becausewhich directly concern with the success and failure of any company. Iflocation is proper then, it helps to reduce cost of all infrastructuralfacilities like water, power, fuel, row-material, transportation etc. Mustgive full consideration to suitable location of his enterprise becauselocation factors are crucial for profit maximization. The plant is located at ‘G.I.D.C.’. This area is considered as anindustrial zone and various infrastructural facilities like transportationfacility, power, fuel, water etc. are available easily and nationalhighway it’s just near by this area. Here, some factors are given. 1) Raw-Material :~ Raw martial is prime factoring that affect location of industry. The factory is located near the row material producing center. Nearness to the source of raw-material reduces the cost of transportation.
  13. 13. 2) Power & Water Facilities: ~ Power is necessary for the process of production and for transporting finished goods and raw- material, power may be electrical, diesel and atomic energy are localized and mobile water is also available there.3) Labour :~ Labour are the main element of production, if the labours are efficient then production would be of better quality and quantity. As plant is totally industrial estate this is the main reason , firm will get the best skilled labours. Machine can’t produce anything without the availability of skilled labour4) Market:- Market is also important factor that affect the location of industry because if the final product is marketed as early as possible. So problem of working capital is lower.
  14. 14. 8 Introduction of product My product is cattle food. Means food for animal. This productis particularly known as cotton seed cake. This is my main product.The main raw material of my product is cotton seeds. And duringthe production process I also get raw cotton seed oil. So my products are:- Main product: - cotton seed cake Subordinate product: - cotton seed oil (raw)
  15. 15. 9 Market Details for the Product The product is mainly for the animal. We know that in Indianvillage, there are so many tamed animals. So the requirement ofcattle food is very high. And the demand of cattle food is evergreen.My subsidiary product is cotton seeds oil. So the demand of bothmy product is high. So I can get market easily. Target market for my product is the village, where tamedanimal are so many. My product is also healthy for the animal, sothe demand of this product is high.
  16. 16. 10 Details of Raw-Material Raw-material is a prime for the production of the product,and it is nothing but input which through some processing we canget finally output.raw material means, which thing you use for finalproduction. For the production cotton seeds cake mainly cotton seeds useas raw-materials.* Supplier Of Raw-Materials: ~ 1). Raj jinnig, 8/G Plot, Ajar Industrial Estate, Rajkot. 2). Krishna jinnig Pvt.Ltd. 10/2C, Kalavad Road, Metoda,
  17. 17. 11 Details of Machine & Equipments In the production of cotton seeds cake mainly followingmachines are required.Sr.No. Name of the Quantity Price Total Machine1 X-piller 2 15,00,000 30,00,0002 Nutilisur 1 60,000 1,20,0003 Boiler 1 5,00,000 5,00,0004 Elevator 2 2,00,000 4,00,0005 Cistern 2 1,50,000 1,60,0006 Electric motor 2 5,000 10,000 Total Amount 41,30,000
  18. 18. 12 Production Process Production Process refers to the whole process from raw-materials to semi finished and then final production. The production process of my industries for produce cattle foodcake are as under. The first cotton seeds reach at railing through conver then thiscotton seeds reachat X-piller machine and detached cotton seeds oiland cotton seed cake the cotton seed oil go at cisten and cotton seedscake go for pakageging now final; product is ready.
  19. 19. 13 Details Of Marketing Marketing means the buying and selling activity of products. Inshort you can say that, how you sell your final products to theconsumer. Marketing is most important because, if you can produceyour final products but you can’t sell it then your production isnothing.* Elements of Marketing: ~ 1) Channel of Distribution:- Channel of distribution means the by which wayyou sell your final product. Our industry adopts two types of channel of distribution. {A} Direct to the customer {B} Whole seller to the customer. 2) Advertisement:- It is the most important for today’s competitive businessfor the success of the business the advertisement is crucial decision forus, and through it you can spread awareness of your product in themarket.
  20. 20. Our industry gives advertisement by, {A} News Paper {B} Holdings {C} Pamphlets distribute in villages. 3) Target Market :- It is not possible for any businessman to satisfy all type of human needs and wants by single business. So the business targets some specific group of people for the particular product known as target market. Our industries target market is ‘Farmer’. 4) Pricing Decision :- Decision concerning price to be followed for a period fame may be called price policies. Pricing decision has strategic important in any enterprise. Good pricing policy is always desired by all organization. Mostly we measure price is the exchange value of a product or services always express in money. There are many methods for taking pricing decision. So our industry decide price on the basis of ‘Going Rate Pricing’. In this method charging the same price as compare to competitor’s price. PRICE 50 kg = 640rs.
  21. 21. 14 Financial Details [A] Fixed Cost: ~ 1) Machinery & Equipments :-Sr.No. Name of the Quantity Price Total Machine1 X-piller 2 15,00,000 30,00,0002 Nutilisur 1 60,000 1,20,0003 Boiler 1 5,00,000 5,00,0004 Elevator 2 2,00,000 4,00,0005 Cistern 2 1,50,000 1,60,0006 Electric motor 2 5,000 10,000 Total Amount 41,30,000 2) Total Fixed Capital :-Sr.No. Particulars Amount1 Land & Building 50,00,0002 Machinery 41,30,0003 Pre-Operative Expensive 8,00,0004 Other Expenses 70,000 Total Amount 1,00,00,000[B] Working Capital: ~ (1) Raw materialSr.No. Particulars Quantity per Rate per Total tones tone1 Cotton seeds 50 10,000 5,00,000 Total Amount 5,00,000
  22. 22. 2) Salary of Staff Members :-Sr.No. Particulars No. Salary Total1 Unit Manager 1 10,000 10,0002 Accountant 1 7,000 7,0003 Peon 1 1,000 1,0004 Machine Operator 1 2,000 2,0005 Skilled Worker 3 2,000 6,0006 Packer 1 1,500 1,5007 Chokidar 1 1,000 1,0008 Super wiser 1 7,000 7,0009 Sales man 2 2,000 4,000 Total Amount 39,500 3) Utility :-Sr.No. Particulars Amount1 Power 25,0002 Water Supply 2,000 Total Amount 27,000 4) Other Contingent Expenses :-Sr.No. Particulars Amount Postage & Stationary 1,000 Telephone Charges 1,500 Repairs & Maintenance 2,000 Transportation Charges 15,000 Insurance Charges 2,500 Advertisement Charges 2,000 Sales Expenses 1,000 Total Amount 25,000
  23. 23. 5) Total Working Capital :-Sr.No. Particulars W.C. per W.C. per 3 W.C. per Month Months year1 Raw-material 5,00,000 15,00,000 60,00,0002 Salary 39,500 1,18,500 4,74,0003 Utility 27,000 81,000 3,24,0004 Other 25,000 75,000 3,00,000 Total Amount 5,91,500 17,75,000 70,98,000[C] Total Capital Investment: ~Sr.No. Particulars Amount Total Fixed Capital 1,00,00,000 Total Working Capital 17,75,000 Total Amount 1,17,75,000[D] Sources of Finance: ~Sr.No. Particulars Total Loan Own Capital Amount Nilesh Rohit Total Fixed 1,00,00,000 40,00,00 36,00,00 24,00,000 Capital 0 0 Total Working 17,75,000 5,00,000 7,75,000 5,00,000 Capital Total Amount 1,70,98,000 60,98,00 66,00,00 44,00,000 0 0
  24. 24. [E] Calculation OF Depreciation: ~Sr.No. Particulars Amount Rate of Amount of Fixed Depreciatio Assets n Building & Land 49,50,000 5% 2,47,500 Machinery & 15,00,000 10% 1,50,000 Equipments Total Amount 3,97,500
  25. 25. 15 Profitability of The ProjectParticulars AmountTotal Sales 1,50,00,000Less : Variable Cost 20,00,000 Contributio 1,30,00,000n Less :Fixed Cost 75,00,000 Profit Before 5,50,00,000Tax Less : Tax @ 35% 19,25,000 Total Net 35,75,000Amount
  26. 26. 16 Calculation Of Ratio1) Gross Profit Ratio: = Gross Profit Sales 100 = 1,80,000 2,00,00,000 100 = 90 % 2) Rate On Return On Investment : = Net profit Total capital 100 = 48, 00,000 1, 70, 98,000 100 = 28.07 % 3) Net Profit Ratio : = Net profit Sales 100 = 48, 00,000 2,00, 00,000 100 = 24 %
  27. 27. 17 B.E.P. Analysis Break even point is the abbreviation used for B.E.P. this is the pointof ‘No profit No loss’ situation. It is the ideal situation for the firm ifthe firm exceeds its sales beyond B.E.P. firm enjoys the profit and ifscale below the B.E.P. point, it will suffer losses B.E.P. may be foundusing the following formula.= Fixed Cost Fixed Cost + Profit 100 = 1,00, 00,000 1,00,00,000+ 48,00,000 100 = 67.57 %
  28. 28. 18 Risk Factors1) Changes in government polices may affect the profitability of the firm, for e.g. Government gives subsidies to the farmer etc.2) The intensity of competition may increase which may not be favorable for this business.3) My industry depends on agricultural product, and agricultural product depends on rain, rain is mot certain, indirectly demand of my product is not certain.4) Price of my product is not fixed of all time, so demand is also uncertain.
  29. 29. 19 Future Plan In today’s market full with competition, in today business, if thereis no change in product, we will not survive in the market for longtime. So my future plane is innovate new type of food for animal, themain thing of my dreams food is that food will be cheap in cost andgive more power to animal. Now at he initial time my industries is not able to produce bulkproduction so in future I will be introduce new machinery and startingbulk production.
  30. 30. 20 Conclusions In today’s era the animal’s milk is important and the demand ofmilk is also high, for getting milk from animal we should give somehealthy food to animal so the scope of animal food is high, so demandof my product is also high. It includes future expansion and development of the project,according to proposal project as considered project as considered tohave better prospects.