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business plan

  1. 1. A BUSINESS PLAN ON MAHAVIR BATS PVT. LTD.PRODUCT : CRICKET BATSPREPARED BY : RAIYANI KHYATI V.CLASS : M.B.A.ROLL NO : 117360592032COLLEGE : N.R.VEKARIYA -JUNAGADHACADEMIC YEAR : 2011-12SUBMITTED TO : DR. RAJESH PATEL
  2. 2. DECLARATION I have undersigned RAIYANI KHYATI V. a student of M.B.A. herebydeclare that the project report is my own work. This work has not been previously submitted to any other university for anyother examination.Date :Place : JUNAGADH Signature [RAIYANI KHYATI V.]
  3. 3. ACKNOWLEDGEMENT Time has no passage to mark its existence but we have language to express.No doubt that the word ‘Thanks’ is very small to express my hearty feelings. Last but not least, I am indeed thankful to my parents for their moral support,encouragement and involvement in my mission and other friends for their help andco-operation. RAIYANI KHYATI V.
  4. 4. PREFACE Small Scale Industry is the pillar of industrialized Indian economy. In India,the S.S.I. provides more than five times employments than the Large Scale Industry.More over, in a short time period,. I have made a notable contribution in the adoptionof modern techniques. It is very good opportunity for me to submit this report for under theprescribed syllabus of Gujarat Technical University,. The object of this report is todevelop entrepreneur skills and awareness. For this purpose the product of Cricketbats for cricket. This project provided me with the knowledge of various aspects oflaunching a new product in this era. I have tried my level best to make this reportmost precise, relevant and in systematic manner. ]
  5. 5. INDEXSR. NO. NAME OF THE TOPIC PAGE NO. 1 Introduction...........................................................................01 2 Project at a glance.................................................................02 3 Implementation schedule......................................................03 4 Promoter’s background.........................................................04 5 Justification of location.........................................................06 6 Basis and presumption..........................................................09 7 Pro. details.............................................................................10 8 Details of Raw material........................................................11 9 Use of application of product................................................12 10 Market Potential....................................................................13 11 Process outline......................................................................14 12 Capacity utilization...............................................................16 13 Financial aspects...................................................................17 14 Fixed capital details..............................................................18 15 Working capital details.........................................................20 16 Total capital investment........................................................21 17 Sources of finance.................................................................22 18 Interest on investment or capital...........................................22 19 Depreciation schedule...........................................................23 20 Cost of production.................................................................23 21 Sales turnover........................................................................24 22 Annual fixed cost..................................................................24 23 Profitability analysis.............................................................25 24 BEP Analysis........................................................................26 25 Ratio analysis........................................................................27 26 Projection..............................................................................28 27 Future plan............................................................................29
  6. 6. INTRODUCTIONThis. is economic strength of country. This fact is realized by India afterindependence. But in recent years, . India has undergone rapid changes and hadflourished in India in early times. S.S.I. provides Raw Material to large scale unitsand to be partner of success. The most important role of S.S.I. in Indian economy isas greater of employment and equal distribution of income. MAHAVIR BATS PVT LTD. is one of the units of S.S.I. The purpose of thisunit is to manufacture cricket bats. Cricket is very popular and played not only in ourcountry but all over the world. After partition of the country in 1947, a large numberof workers migrated to India. They subsequently settled down in Gujarat especiallyin Saurashtra, where they started manufacturing of cricket instruments.
  7. 7. PROJECT AT A GLANCEName of the unit - MAHAVIR BATS PVT. LTD.Constitution - Private limitedType of the unit - Small scale manufacturing unitProduct’s Name - Cricket batsLocation of unit - Manufacturing unit Plot no: 13, Metoda, GIDC Rajkot, Gujarat.Address of the office - G.I.D.C. Metoda, Plot No. 6 Rajkot.Co. registration no - R94900GJ013Form of the unit - PartnershipS.S.I. registration no. - Applied forLocation of the unit - MAHAVIR BATS PVT. LTD. G.I.D.C. Metoda, Plot No. 6, Rajkot.Employee - 10 personsWeb site - www.MAHAVIR bats.comE-mail - MAHAVIRbats@gmail.comWorking days - 300
  8. 8. IMPLIMENTATION SCHEDULESr. No. Particular Period1 Collection of data 2 months2 Preparation of project report 1 month3 Local formalities 1.5 month4 Selection of site 1 month5 Construction of building 3 month6 Machinery installation 1 month7 Recruiting personnel 1 month8 Selection of procurement 1 month9 Receipt of Raw material 15 days10 Obtaining power and water connection and 1.5 months installation of power facilities11 Registration of S.S.I. 1 month Total 24.5 months
  9. 9. PARTNER’S BACKGROUNDPARTNER – 1 Name - Ujjval P. Mithani Age - 20 Address - “TAPOJVAL” Royal park, Kalawad road, Rajkot. Qualification - MBA Present activity - Promoter of the xenon cable pvt. Financial contribution - 50% Responsibility - Managing Director Experience - 3 years in management
  10. 10. PARTNER – 2 Name - Siddharth V. Padaria Age - 24 Address - “Amivarsha” Dhoraji road, Jetpur. Qualification - MBA Present activity - The M.D. of Xenon cable Pvt Ltd Financial contribution - 25% Responsibility - C.E.O Experience - 3 years
  11. 11. PARTNER – 3 Name - Ankit H. Vora Age - 22 Address - “Madhav” Race Course Park, Rajkot. Qualification - MBA Financial contribution - 25% Responsibility - Production manager, Finance Dept. & HRM Experience - 2 years
  12. 12. JUSTIFACTION OF LOCATION Site of selection is an important activity because a good location may reducethe cost of production. Locating a business involves a large relatively permanentinvestment. If the site selection is not proper, all the money spent on factory buildingmachinery and their installation will go in waste and the owner has to suffer a greatloss. Therefore, the site for the factory should be selected very carefully. According for our purpose industrial proposition at Metoda, GIDC, Taluka –Rajkot, District – Rajkot, Gujarat state is selected by us. All infrastructure facilitiesavailable the same places are as follows.A… TRANSPORTATION The purposed factory will be at Metoda, Rajkot well connected by three modes of transportation, Railway, Roadway & Airway. The factory site is in proximity with the Rajkot Railway Junction and Domestic Airport, the national highway – 8B and the state highway Ahmedabad-Rajkot-Kandla. The nearest international city is Mumbai 45 minutes flying time and the nearest major port is Kandala 200 km. by road. So all kind of transporting vehicle, truck, train, ship, plane etc are available not to far from the site and hence our location in respect of to transport availability for the product concerned is the most suitable one.B… AVAILABILITY OF RAW MATERIAL Mainly for our product BAT is needed other raw materials which are in detail given later in this report. All those raw materials are available at Ahmedabad, Bombay, and Delhi & Chennai.
  13. 13. C… MAN POWER All manufacturing concern small or big always depends on available man power skilled, unskilled, and semiskilled. We have also given a thought to this matter and found that ours is an area cheep labour is easily available in our project.D… MARKET All products manufacturers always think about market of this product. Our nearest and main markets are Bombay, Delhi, Ahmedabad, Rajkot, Baroda, Jamnagar, Mahesana etc.E… WATER FACILITIES Water is not required for product purpose. It is required only for domestic purpose. Arrangement will be made at the site by installing tube well.F… SOURCES OF FINANCE Finance is oxygen or blood for the industry and thus the procurement of finance is very vital. Proximity of the site, to the Rajkot city makes the source of finance closes to the concern. The various financial industries like the nationalized banks, commercial banks, GSFC branch are located in Rajkot city near to the site of the factory.
  14. 14. BASIS & PRESUMPTIONThe profit is drawn on the basis of following presumption.1… No. of shifts - 2 shifts (8 hours each shifts) Working days - 300 days Working hours - 16 hours2… The cost of land is based on the prevailing rates at Metoda – GIDC, Rajkot.3… The interest rate and depreciation rate are fixed as per the government specification.4… The salary and wages have been decided on the basis of local markets.5… Break Even Point has been calculated on the full capacity utilization basis.
  15. 15. PRODUCT DETAILS Generally, these products are based on the polishes and wooden bat thepurpose of unit is to produce qualitative product in the less cost. To make proper and qualitative bat iroper shape, proper weight, qualitativewood, initial stitching etc. are needed. Because these things are help the bowler indelivery and spinning the ball. In this unit, four types of cricket balls are producedaccording to quality. The hockey and cricket balls are duco finished. There is also thedemand for unglazed balls. So, unglazed balls are also produced in this unit.
  16. 16. DETAILS OF RAW MATERIALS Raw materials are one of the important things for production. If there is noraw material then there would be no product of this unit. The firm obtains most of itsraw material from the local market. The important raw materials required for the manufacture of cricket bat iswood and bamboo wood. Thus, the raw materials are available in open market inGujarat. So, unit does not find any difficulty in collecting raw materials.
  17. 17. USE & APPLICATION OF PRODUCT Cricket is the most popular game in our country as well as in all othercountries of the world. Care is to be taken to see that the wood should be properly seasoned and freefrom any kind of termites. The wood is selected and sends to the productiondepartment for its further process. The use of bat is very obvious relating withplaying cricket.
  18. 18. MARKET POTENTIAL Cricket is a very popular game in India as well as all the countries all aroundthe world. So it is in demand in the countries of the world. Looking to the internal and increase in export demand, there is a good scopefor starting new manufacturing units in different parts of the country. Rajkot is thestarting place or city, where a large number of workers started manufacturing cricketbats. The demand for quality goods is increasing hence there is a scope for another10 to 15 new units every year. The raw materials required for the manufacture ofcricket bat indigenously available. Even in rural areas, these games are very famous.
  19. 19. PROCESS OUTLINE The heart of any unit is manufacturing department. This department is alsocalled lubricant oil of any unit. The main aim of any industry is to manufacturesomething extra-ordinary which attracts the customers. Let us see the process ofmanufacturing of this unit. Growing Willow The Cricket Bat Factory use only the best English willow for the production of their cricket bats. Salix Caerulea or Alba Var varieties are grown and harvested by our Willow Manufacture. Splitting Rounds Once the willow has been harvested and brought back to the factory at Robertsbridge in East Sussex it is cut into roundels and then separated into splits (each of which will form a single cricket bat). The bark is then removed. Cutting Clefts The wood is then machined into a cleft (as illustrated). At this stage the operator decides which area of the cleft will become the face of the bat. It is obviously vital that the face should be free from blemishes and knots as these may impair performance.
  20. 20. Seasoning Willow is a soft fibrous reed which in its natural state is very moist. In order to produce a bat of good performance and weight it is necessary to dry the clefts. To do this they are placed in a custom built kiln in which the temperature is monitored and maintained at approximately room temperature. The willow remains within the kiln for approximately six weeks. Once the cleft has been dried, it is pressed, as illustrated, at approximately 2000lbs per square inch. This produces the drive and durability that is essential for good performance. Fitting Handle The handle, a laminated construction of cane and rubber strips (treble sprung), is fitted through the precise splicing of the handle into the blade. Dustin will set the handle slightly forward of the blade ensuring a perfect pick up once the bat is made. This enhances performance and accentuates the bow in the bat. The handle is secured using a water resistant wood glue and left overnight to dry.Bat MakingAt this stage the bat now comes under theexpert eye of master bat maker DustinGaskell, Dustin first came to work forGabba Sporting Products at the age of 17and has developed over the years into anexpert in the fields of cricket batmanufacture, working with some of theworlds best cricketers. He uses traditionaltools such as the draw-knife to balance andshape the bats to perfection.As with all the other stages of production,the hand shaping is absolutely unique toeach bat. During the shaping, the bat will beremoved from the vice and tested forbalance and form by the bat maker, usinghis knowledge of the game as a point ofreference for balance and pick-up. Onceshaped, the bat will be both course and finesanded. Like the shaping, the sanding isdependant upon the eye and skill of ourBatmaker. The characteristic finish of aGlide bat can be attributed to very fastidioussanding, which has always been a point ofpride.
  21. 21. The handle is bound using the finest qualitytwine. The bat is mounted in a lathe whichis controlled using a foot treadle; the handleis brushed with glue and whipped with thetwine which provides strength at the top ofthe splice and throughout the length of thehandle.The blade is then finely burnished using acompound wax which polishes and flattensthe wood leaving a satin finish.Note: traditionally bats were boned insteadof polished - the use of a bone or piece ofcane to compress the fibres giving both thefinal finish and a final pressing. With TheGlide and any good bat production, if thepressing and sanding are correct, then thefinish is obtained though burnishing, soboning is never necessary. The key to ourfinish is not a bone or a clever polish, butthe quality of the sanding.Once bound, Chevron grips are fitted to thehandle and labels are applied to the face,back and sides of the bat. All our bats thenundergo a final quality inspection, beforebeing packaged and distributed to shops.With each bat is carried the hope that thetime and effort we expend will be rewardedby the owners care and attention, and greatsuccess at the wicket. Please contact us formore information on out personally handcrafted cricket bats.
  22. 22. CAPACITY UTILIZATION The total capacity installed is 25,000 balls per month. In the first year, 50%of the capacity shall be utilized i.e. the month production of balls will be 15,000. Inthe second and third capacity utilization will be 60% and 70% respectively. Actually the capacity of the unit is always fluctuating. At the time ofworldcup or cricket tournament, the demand of cricket balls will be increased. Sounit can produce more balls at that time.
  23. 23. FINANCIAL ASPECTA. Fixed capital 1. LandSr. no. Particular Area Rate Total value (in sq. feet) (in sq. feet) (In Rs.)1 Open land 4000 1000 40,00,000 2. BuildingSr. no. Particular Area Rate Total value (in sq. feet) (in sq. feet) (in Rs.)1 Building area 3500 500 17,50,000 covered for office, storage etc. 3. Machinery & EquipmentSr. Particular CostNo.1 HP Motor 2500002 Power operated press 1700003 Automtic injection moulding machine 900004 Stamping press qty. 3 900006 Electric drying oven heated 2 800007 Electrification, installation and transportation charges8 Other equipments 400009 Stitching frames 6600010 Other office equipments 20000 Total 8,06,000
  24. 24. 4. Office EquipmentSr.no. Particular Quantity Rate Amt.(Rs) 1) Computer + Printer 2 25,000 50,0002) Telephone 3 5,000 15,0003) Air Condition 2 20,000 40,0004) Fax 1 10,000 10,0005) Water cooler & purifier 2 10,000 20,0006) Vacuum cleaner 2 5,000 10,000Total(Rs.) 1,45,0005. FurnitureSr.no. Particular Quantity Rate Amt.(Rs) 1) Sofa set 3 8,000 24,0002) Revolving chairs 2 3,000 6,0003) Office chairs 5 200 10,0004) Cabin table 2 6,000 12,0005) Cupboards 3 3,000 9,0006) Glasses & Wooden - - 27,000Total(Rs.) 79,0006. Total fixed capital
  25. 25. Sr. no. Particular Amt.(Rs) 1) Land cost 40,00,000 2) Building 17,50,000 3) Machinery & equipment 8,06,000 4) Office equipment 1,45,000 5) Furniture 79,000 Total(Rs.) 67,80,000B. Working Capital 1. Raw material Sr.no. Particular Quantity Rate Amt.(Rs) (in kg.) (Per kg.) 1) Wooden 3495 100 3,49,500 2) Rubber 4000 100 4,00,000 3) Fevicol 2000 50 1,00,000 4) String 500 Total (Rs.) 8,50,000 2. Salary & Wages(1 month) Sr.no Designation No. of Rate per Amt.(Rs) . person man 1) Production Manager 1 14,000 14,000 2) Marketing manager 1 14,000 14,000 3) Accountant 1 6,000 6,000 4) All officers 6 6,000 36,000 5) Receptionist 1 3,000 3,000 6) Peons 2 2,000 4,000 7) Supervisions 1 4,000 4,000 8) Skilled worker 5 5,000 25,000 9) Unskilled worker 10 1,500 15,000 10) Security guard 1 1,500 1,500 Total (Rs.) 1,22,500 3. Utilities(One month)
  26. 26. Sr. no. Particular Amt.(Rs) 1) Power 18,000 2) Water 2,000 Total (Rs.) 20,000 4. Other contingent expenses Sr. no. Particular Amt.(Rs) 1 Postage & stationary 1,000 2 Repair & Maintenance 1,500 3 Telephone Bill 2,000 4 Transportation Charges 3,000 5 Insurance Premium 2,000 6 Advertising expense 5,500 7 Sales expenses 1,500 8 Misc. Expenses 1,000 Total Expenses (Rs.) 17,500 5. Total working capital Sr.no. Total Amt. Total Amt. Particular (One Month) (Three Months) 1) Raw material 1,22,500 3,67,500 2) Salary & Wages 8,50,000 25,50,000 3) Utilities 20,000 60,000 4) Other contingent 17,500 52,500 expenses Total (Rs.) 10,10,000 30,30,000C. Total Capital Investment Sr. no. Particular Total(Rs) 1) Total Fixed capital 67,80,000 2) Total Working capital 30,30,000 Total Project Cost 98,10,000
  27. 27. D. Sources of Finance Total Amt Loan of Owner Sr.no. Particular (Rs.) Borrowed Capital Total Fixed 1) Capital 67,80,000 9,00,000 58,80,000 Total Working 2) Capital 30,30,000 11,00,000 19,30,000 Total Amt (Rs.) 98,10,000 20,00,000 78,10,000E. Interest On Capital Sr. Particular Amt (Rs.) Rate of Total Amt. no. Interest Of Int.(Rs.) 1 ICICI Loan 20,00,000 12% 2,40,000 2 Own Contribution 78,10,000 8% 6,24,800 Total Amt. of Interest 8,64,800F. Calculation of Depreciation Sr.no. Particular % Total(Rs) 1 Building 10% 1,75,000 2 Mach & equipment 20% 1,61,200 3 Office equipment 10% 14,500 4 Furniture 15% 11,850 Total Amt. 3,62,500G. Cost Of capital
  28. 28. 1stYear (60% Prod.Particular Capacity)Variable CostRaw Material 1,02,00,000Wages 4,80,000Utility 2,40,000Other contingent Exp. 2,10,000Total Variable Cost 1,11,30,000Fixed CostSalary Of Staff 9,90,000Depreciation 3,62,550Total Interest 8,64,800Other exp.(20% of the contingents exp.) 42,000Total Fixed Cost 22,59,350Total cost 1,33,89,350 OPERATING STATEMENTParticular Amt.(Rs.) Total (Rs.)Sales [A] 13516000Cost of productionRaw Material 1020000Utility 240000Wages 480000 10920000Add opening stock -Less finished stock 115600Total opening cost [B] 10804400 1084400Gross profit (A-B=C) 2711600Indirect Exp.Salary staff 990000Dep. 362550Other expensesVariable (50% of other exp.) 105000Fixed (20% of other exp.) 42000Total indirect exp. [D] 1499550 1499550EBIT (C-D=E) 1212050Interest on own capital 624800Interest on borrowed capital 240000Total interest [F] 864800 864800EBT (E-F=G) 347250-tax (50%) 173625EAT 173625
  29. 29. RATIO ANALYSIS Return on investment EBIT Return on investment = Total capital employed 1212050*100 Return on investment = 9810000 Return on investment = 2.36 % Cost of capital Interest on owned capital + interest on Cost of capital = borrowed capital *100 Capital employed 864800*100 Cost of capital = 9810000 Cost of capital = 8.82 % Gross Profit Ratio Gross Profit*100 Gross Profit Ratio= Total sales 2711600*100 Cost of capital = 13516000
  30. 30. Cost of capital = 20.06 % Net profit ratio Net profit ratio*100 Net profit ratio = Total sales 347250*100 Net profit ratio = 13516000 Net profit ratio = 2.57 % Fixed cost to net worth ratio Fixed cost Fixed cost to net worth ratio= Net worth 6780000 Fixed cost to net worth ratio= 9810000 Fixed cost to net worth ratio= 0.69 %
  31. 31. FINANTIAL STATEMENT TRADING & P&L ACCOUNT Particulars Amount (Rs.) Total amount
  32. 32. Income Sales 13516000 + closing stock 115600 13631600 (-)Mfg. expenses Opening stock - + purchase of RM 16200000 + utility 240000 +wages 480000 10920000 Gross profit 2711600 (-) indirect expenses Other exp. Variable 105000 Fixed 42000 Salary of staff 990000 Depreciation 362550 Interest of borrowed capital 240000 Interest of owners capital 624800 2364350 Net profit 347250 Balance sheet Particulars Amount (Rs.) Total amount
  33. 33. LiabilityCapital Promoters capital 7810000 Borrowed capital 1750000 9560000Reserves & surplus ---Profit & loss account 173625 9733625AssetsFixed assets Land 4000000 Building 1750000 (-)dep 175000 1575000 Machinery & equipment 806000 (-) dep 161200 644800 Office equipment 145000 (-) dep 14500 130500 Furniture 79000 (-) dep 11850 67150Current assets Debtors 2350575 Cash 850000 Closing stock 115600 3316175 9733625 BEP ANALYSIS
  34. 34. In this unit only one type of product we produce.Price of product = Rs.3003.56So, Production unit = Total sales Sales price per unit = 13516000 3003.56 = 4500 unit.Average variable cost = Total variable cost Production unit = 11130000 4500 = Rs. 2473.33Contribution = sales price – average variable cost = 3003.56-2473.33 = 530.23Break even point (in unit) = Total fixed cost Contribution = 2259350 530.23 = 4261 unit. (In Rs. 12798169.16) RISK FACTORS
  35. 35. • Changes in the government policy may after the profitability of the firm.• There is high level of competition with existing unit like RBK, PUMA, SG, SS TON etc.• In the future economic environment changes so that organization affected like inflation, recession.• A market of other firm high level expenses to advertise and this unit not bear that advertising expenses. FUTURE PLAN
  36. 36. MAHAVIR BATS PVT LTD. has specified future plans to follow. It hasfixed goals to be achieved in future. Certain future plans of this unit are as under. • Company wants to increase its sales and profit and be a large scale industry. • Company wants to wider its network in whole country. For it they are deciding to establish branches in most of the state in India.Thus, this company has bright future vision and it wants to extend its coverage. CONCLUSION
  37. 37. A developing country is necessary to develop the small sectors orcottage industry because to balanced growth means widely distribute of income. Asmall sector is also creating employment in the economy as the production is doneby the manpower. In this situation I am very proud to study this subject and this businessand prepare report on it.

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