BUSINESS PLAN FOR ORGANIC JELLY CRYSTAL CUPS MANUFACTURING & SUPPLYING

JELLICO NATURAL DESSERTS PRIVATE COMPANY
BUSINESS PLAN
FOR
ORGANIC JELLY CRYSTAL CUPS MANUFACTURING &
SUPPLYING
Jelico Natural Desert (Pvt) Company
No: 45, Waliwita road, Piliyandala
Tel. (+94)11-2234564
Name of the person Title Address Contact No. Index No.
D.M.P.S. Dissanayake CEO &
Marketing
Manager
No:705/4, Romiyel ME,
Panagoda, Homagama 071-6979823 12375
W.M.K. Kalhara Managing
Director
No: 38, temple road,
Katubadde
071-9870947 12329
W.C.N.Wijerathne Financial
Manager
229/4, Katwana road,
Homagama
071-9258272 12302
W.V.Y.Vidyani HR Manager Kosgaha junction, Udugama,
Yagirala
077-5989427 12320
03.08.2018

Executive Summary
“Jelico Natural Deserts” is a jelly manufacturing and retailing company launched in early
2018. This company will specialize in creating Organic & completely Natural jelly which is
with medicinal value to treat gastritis; produced using the leaves of an indigenous plant
species known to be Kahipiththan. The management is with skilled and experienced personal
who put tangible resources for the company such as land building to seek the profit with least
cost.
This will be a new experience for the consumers as a desert as well as a simple remedy for
gastritis which is a common disease in many age categories. According to the consumer
surveys it has proved that there is a demand for a natural remedy for gastritis but there is a
little bit low demand between the consumers for jelly as a desert. Even though the situation is
like that the competencies that we have such as being totally natural, organic and medicinal
value will improve the image between the consumers and help to compete with the existing
competitors who lack these competencies.
Other than that by using a competitive promotion strategy which including verbal non verbal
media and social media will enhance our popularity among the focused consumers
group/market and not focused market. Other than that the seasonal promotions will help us to
touch the every ethnic group of our country and the promotions at high end tourist
destinations aimed to touch the international market.
Product will be place in different market places such as in super markets , high quality
restaurants , airports , in cafeterias and in retails shops in order to reach the focus group in
many ways and price is set in a affordable range and to suitable for the quality and the added
value which compared to the competitors.
Bellow table illustrate a summary of the financial plan for the jelico Natural Deserts Pvt
company.
Total start-up investment cost for Jelico organic jelly desert cup production
business
13,001,000
Own / group contribution funds 7,500,000
Funds to be borrowed 5,501,000
Projected net profit for first year with considering depreciation values 249,500
Projected profit for first year without considering depreciation values 792,000
Funds are planned to cover by promoters’ funds including equity (Rs.7,500,000.00), bank
lending (Rs. 50,000.00), grants from government agencies for SMEs (Rs.50,000.00) and
investment already received (rest cash in hand).

Table of Contents
Title Page
Executive summery
Table of Contents 1
1.0 Vision and Mission Statements and Goals 2
2.0 Company overview 3
3.0 Marketing plan 4
4.0 Production plan 15
5.0 Management Plan 21
6.0 Financial Plan 23
7.0 Appendices 27

Strictly Private & Confidential
© Jelico Natural Desert (Pvt) Company 2018
This document is the proprietary property of Jelico Natural Desert (Pvt) Company.
Copying or otherwise distributing the information contained herein is a breach of confidentiality agreement.
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1.0 Vision and mission statements and goals
1.1Vision statement
It is our vision to be the premier manufacturer and supplier of the art of the Sri Lankan
indigenous, natural deserts that contribute to an affordable healthy desert with some
medicinal value, supply for the world.
1.2Mission statement
As a team, our mission is to drive sustainable business growth in 2022 that ensure
continued success and enhance value for our customers, employees, associates,
distributors and communities by manufacturing and also supplying natural healthy desert
that offer medicinal value.
1.3Goals
• To introduce new jelly product which provide both values of organic food and
medicinal value.
• To produce product which can consume anytime, anywhere and any age grouped
people with affordable price.
• To contribute for the empowerment of organic agriculture within Sri Lanka.

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2.0 Company overview
“Jelico natural deserts” is a startup specialty manufacturing and retailing company launched
in early 2018 at the Pilyandala. The company is registered as a general partnership with four
partners (See Management plan) who will be jointly and severally liable for the debts of the
company with their property. The company is consisting of a medium scale manufacturing
facility, producing value added natural desserts as cups, sized to customer requirements. This
company will specialize in creating natural jelly deserts for retailing purposes as well as
supplying for functions. Our first introducing organic jelly product is prepared with 100%
locally grown ingredients. The company plans to expand operations and business by
increasing the current production and this plan covers all aspects with respect to the Jelico
organic jelly desert cup production business.
Company name : Jelico Natural Desert (Pvt) Company
Type of company : Private
Type of Business : Manufacturing and Retailing Business
Form of business ownership : Partnership
Name of Brand : Jelico – Taste from nature
Company address : No : 45, Waliwita road, Piliyandala
Contact number : 011-2234564
Trade mark of the proposed product

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3.0 Marketing plan
3.1 Product Description
Jelico oraganic jelly is a natural jelly product made of natural “Kehipiththan” leaves which
can be used as a dessert. It is a healthy lifestyle choice, and could play a major role in
controlling gastritis. And it is a delicious and healthy dessert at an affordable price.To attract
the market we have focus on coming up with different flavours of Jelly cups like different
kind of fruit flavours and some other flavours such as mint, vanilla etc. The serving size of a
one normal cup will be 80 mg and there will be different quantities as it will increase the
range of choices for the target market.Jelico Jelly is including specific ingredients that would
be of health conscious which can be used as a healthy dessert.
Special features of the product:
 A natural remedy for controlling gastritis
Jelico jelly is made out of natural kehipththan leaves which have an Ayurvedic
medicinal value for reducing gastritis.
 A natural product
Jelico is a natural product which does not contain any kind of synthetic chemicals and
artificial flavors. Therefore there are no any side effects.
 An eco-friendly product
Jelico is an ecofriendly product since the packing material that we are using is bio
degradable and no any environmental impact
 An organic product
Main resource of this product, “Kehipiththan” plants are going to farm by using
organic farming methods, so Jelico can be considered as an organic product.And do
not use any of artificial fertilizers.
Having such features in this product will give us the competitive advantage over other
competitor brands in terms of differentiation.
Figure 01: Proposed product

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3.2 Market Analysis
3.2.1 Internal Environment Analysis
Resources
Tangible Resources:
Company own building for the production and lands to grow the raw materials
Intangible Resources:
Entrepreneur team with skilled people with different core competencies and scientific
knowledge and the skilled employees
Capabilities:
Above resources are integrated in order to invent new product to the market to seek
the competitive advantage through its need for the target consumer group as value
added product
Core Competencies:
Uniqueness to the market as a value added totally natural herbal product which is
prepared using raw materials that are grown using organic farming methods
3.2.2 External Environment Analysis
PESTAL analysis
1. Political
• Changing political scenario over the years
• After end of the civil war- considerable political stability
• Too much power is centered among few individuals in the government regime
• So there are instances where politicians having interferences with the business
and policy changes
• Every good/ service in Sri Lanka being taxed
2. Economic
• Relatively less economic growth rate in this year, so specially small businesses
face number of challenges
• Increase in the prices of the raw materials like gelatin and honey affects the price
of jelly
• The inflation rate will affect the purchase of raw materials and the purchase of
jelly by consumers.
• Income inequality also can affect to the consumption of the product
3. Social
• Increasing demand for healthy products
• Increasing demand for more natural remedies for diseases
• Having desert after lunch and dinner has become customary
• High literacy rate has helped the nation to build a skilled labour market

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4. Technology
• The advancement in technology companies have been able to reduce their costs
to a larger extend
• Sri Lanka has a A and B class road network system- made distribution process
more easy
• Advancements in telecommunication- make advertising and promotions easy.
5. Ecological
• Availability of land with good soil conditions
• The climate change and the consequence of natural disasters like flood And
drought
• Availability of ground water
6. Legal
• Introduction of an Increase in the minimum wage
• Strong labour policies – clearly stipulate working hours, age limits, industrial
safety etc.
• Environmental laws- to protect the environment and natural resources and EIA
and EPL process
• Solid waste management
• Food act - regulate and control the manufacture, distribution, sales of food.
3.2.3 SWOT Analysis
An integration of inside and outside analysis has represented as a SWOT analysis in the
above. Strengths and weaknesses are the factors that are inside the organization which are
Strengths
>Totally natural ,organic and herbal product
>The location of the business
>Existing Knowledge( research, indigenous
knowledge)
>Experts with experience
Weaknesses
>Investment
>Technology
>Raw materials
Opportunities
>Growing demand for organic products in
local and international marker
>Growing demand for the eco friendly
products
>Budget allocated by the government for the
entrepreneur activities
Threats
>Political instability and instability of
the country's economy
>Sever weather
>Existing rules and regulations
>competition from the existing
products

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under control while the opportunities and threats are outside the organization which are
beyond the control of the organization.
Our organizational strengths such as being totally natural, organic and the herbal value can be
used to maximize the opportunities such as the high demand for the organic and herbal
natural products in the international market and to minimize the threats such as the
competition from the existing competitors such as Motha etc. Other than that the location of
the factory will be ease reaching the retailers and consumers and reduce the cost.
Opportunities can be used to minimizing the weaknesses such as the allocated budgetary
funds from the government will help to resolve the lack of finance and to avoid the threats.
3.3 Target Audience Analysis
In order to understand the consumer behavior and the market availability a consumer survey
has been done using an online questioner which covers following aspects.
 Location
 Age groups
 Ethnicity
 Breakfast, lunch and dinner uptake
 Preference for having desert after a particular meal
 Preference for jelly vs. other deserts
 Current situation of Gastritis, among public
 Trend to use natural food as a remedy for gastritis
 Public preference for the product price
Location
Before start the new business identifying target locations to introduce the new product is
crucial. Because at the initial stage introducing the new product to the whole country is not
cost effective. Consumer survey identified some specific locations to introduce our product.
Figure 02: locations of the responders
According to the survey, Colombo and other nearby cities are perfect for promoting our
product.

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Age groups
By Depending on the age group we can use different promotion strategies to promote our
product. For that we have to get an idea about the age groups who have interest on our
product.
Figure 03: Age groups of the responders
Based on the results we get idea most of the young people are interest in our product.
Ethnicity
Sri Lanka is a multi-ethnic country. Various religious and cultural festivals are celebrated
within the country. We can promote our product during these seasons as a desert. Therefore
understanding of ethnicity is important.
Figure 04: Ethnicity of the responders
Breakfast, lunch uptake
Jeico jelly product can be used as medicine for gastritis. Nowadays people spend very busy
life style and they don’t have time to take their meals at proper time. This fact is the main
reason for gastritis.

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Figure 05: Respond of breakfast and lunch uptake
According to survey 32% people don’t take their breakfast and 19%people don’t take their
lunch. Through these results can get idea about condition of gastritis in the country and how
will it affects on the consumption of our product as a natural remedy for gastritis.
Preference for having desert after a particular meal and Preference for jelly vs. other
deserts
If we introduce our product as desert we should have information about market of the other
desert within the country and which type of desert have high demand in the market.
Figure 06: Respond of Preference for having desert after a particular meal

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According to the results 4%people take desert after breakfast, 17%people take desert after the
lunch and 19%people take desert after the dinner. If we take these percentages as cumulative
value it shows relatively high preference for desert.
Figure 07: Respond of Preference for jelly vs. other deserts
Above diagram shows preference to jelly among the people who respond to the survey. Ice
cream, yogurt, fruits, pudding, chocolate and sweets are other desert we consider as other
category. Only 24% responders like take jelly as a desert. That factor can consider as threat
for our business since the consumer group seems to be small.
Current situation of Gastritis, among public
Figure 08:Current situation of Gastritis, among public
According to the results nearly 38%precent suffer from gastritis and among them 72.3%
don’t take any medicine for gastritis. This information gives hint to us about the strength of
market to promote this simple remedy as a medicine for gastritis. We can direct target group
of people who don’t take medicine for gastritis.
Trend to use natural food as a remedy for gastritis
Nowadays people trend to use natural remedies for diseases. Through this question we tried
to understand if people have some idea about use of natural remedies for gastritis since our
product is 100% natural product.

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Figure 9: Respond of Trend to use natural food as a remedy for gastritis
Among the responders only 38% have already try natural product as medicine for gastritis.
For most of the people this product can be new experience .This reason is very important
during our product promotion.
Public preference for the product price
Setting price for the product need to see the affordability of the consumers and the other
factors like it’s brand, quality and added value compared to the competitors.
Figure 10: Respond of Public preference for the product price
Nearly 50%people like afford Rs.100 for one cup of product. This is good sign to our
product.
3.4 Competitive Analysis
Competitor analysis has been done in order to recognize their strengths and weaknesses as
well as the gaps in the market that they didn’t approached yet. It helped to compare and
identify the value of our product to the market and to make a strategic approach to compete
with them. We have identified three competitors in the market and theirs strength and
weakness.

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Company name
and product
name
Number
of
products
Strength weakness
CBL - Ready to
eat jelly cups
6  Well-known brand name
 Ability to store in room
temperature(no need
refrigerator for keeping)
 Affordable price
 Have high flavours
diversity
 New product to the
market
 Use artificial
ingredients to the
product
Motha
confectionery-
Motha jelly
crystals
21  Have been well known by
the customer
 Has operate business more
than 25 years
 Monopoly in the jelly
products sector in Sri
Lanka
 Have more experience
 Have high product
diversity
 Good promotion
 Lack of organic
based products
 Add high amount
of artificial
ingredients to the
products
MD (Lanka
canneries Pvt Ltd)
– MD jelly crystals
5  Have been well known by
the customer
 Good promotion
 Well known by most of the
customer
 Attractive package for the
product
 Lack of organic
based products
 Add high amount
of artificial
ingredients to the
products
3.5 Sales forecast
In the first year we have planned to produce only 1000 jelly cups per week as it is the initial
stage of our business. In the second year we have planned to increase the number of units that
we produce per week up to 1500 and the third year it will be 2000 cups per week. According
to the consumer demand and the profitability of the business the number of units to be
produce will increase.
Year Price per
unit(Rs.)
Units planned to
be sold per week
Units planned to
be sold per week
Units planned to
be sold per year
Total sale
per year
(Rs.)
1 70 1000 4000 48000 3,360,000
2 70 1500 6000 72000 5,040,000
3 70 2000 8000 96000 6,720,000

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3.6 Placing Strategy
This strategy focuses on how our product going to be place in the market according to the
results found through the market analysis.
 We can directly reach consumer by selling small numbers in an out let which is
attached to the production factory .Since it is situated in a commercial hub there will
be market.
 It is important that we make our product extensively available everywhere in the
market, especially in retail outlets such as supermarkets and other confectionery
stores. Initially our distribution is in locations such as Colombo and nearby. In order
to make our product Jelico Jelly an everyday product, we should make the product
available extensively. So we have targeted all the supermarkets around Colombo. The
supermarkets would be Cargill’s, Keels, Laugfs super etc and also the grocery stores
in places where the population is quite high.
 We also are going to place our product in restaurants with high quality food such as
Sensal, P&S, Devon, Fab and especially in cafeterias at universities, private
companies.
 Though we initially focus on Colombo and nearby areas, after few years we are going
to widen our distribution all around Sri Lanka. This will again be by approaching the
supermarkets such as Cargills, Keels, etc. and the grocery stores around Sri Lanka.
3.7 Promotion Strategy
 One of the targets of Jelico is to make our product as a daily used product. Hence we
have created a positioning statement like;
“ Jelico-Taste from nature ”
The main idea behind this is to make them easily remember and recall our product.
Thus, we are focusing making Jelico as the top of the mind brand in terms of Jelly.
 To reach the rest market segments seasonal promotion campaigns are going to be
done to bring the product in to different ethnic groups. Other than that to step to the
international market; product is going to be introduced in to high tourism hotels and in
the air ports and to the restaurants with high quality food which are reached by high
end tourists not the back packers.
 As the product is new to the retail market widely, sales promotions will be the most
suitable mode of promotion for Jelico.
-Free sample give aways
-Buy one get one free, etc. would be suitable.
 Distributing leaflets and brochures outside the retail shops especially in and out of the
supermarkets which includes interesting recipes will be an effective method of
making your customers aware of your product.

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 Social media websites such as Facebook, Instagram, You tube and google+ can be
another mode to promote it.
 Newspaper advertisements are good way to reach a large number of people, especially
those aged 45+ who tend to read newspapers.
-Daily papers
-Weekly papers
 Banners and Posters are another way to communicate about our product to the target
market. It is most versatile and cost effective medium of marketing and they help
people retain the brand’s image through visualization.
3.8 Pricing Strategy
According to the consumer surveynearly 50% people like afford Rs.100 for one cup of
product. This is good sign to our product. Since Jelico is a natural, organic dessert which has
an aurvedic medicinal value people prefer to pay a considerable amount of money to buy our
product. So pricing is not a big issue with our product.So according to the cost and profit
margin the final price of a one single cup is determined as 70LKR.
3.9 Total marketing expenses
Here, the following table expresses the total expenses related to the marketing.it include
expenses of transport, display material, commissions, payments for people in marketing
sector etc.
Type of marketing expenses Rs.
Cost of transport 1000
Display material 3000
Commissions 5000
Payments to helpers in marketing 6000
Packaging expenses 1000
Other expenses 4000
Total marketing expense per month 20000
Total marketing expense per year 240000

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4.0 Production plan
4.1 Location of the business
The main place of business of the Jelico is situated at Piliyandala.The main reason for
selecting that area is easy accessibility of raw materials. The main ingredient of this product,
Kehipiththan plants are available in this area and also we are planning to cultivate them in
some places of Piliyandala area near to Bolgoda River. And other raw materials like honey,
natural flavors and jelly cups are going to purchase from companies in Colombo area.So this
location allows easy transportation of inputs and raw materials to the business as well as
products to the selling centers and consumers due to its proximity to most areas. And also we
have our own land in Piliyandala (No: 45, Waliwita road, Piliyandala) to locate the company.
Figure 01: The location of the business
4.2 Description of raw materials
4.2.1 Raw materials
Jelico consider of including specific ingredients that would be of health conscious which can
be used to position the product as a healthy dessert. The main ingredients to manufacture this
product include Kehipiththan leaves, honey and natural flavors. Other than that we use
decomposable cups to packing purpose.
 Extraction of Kehipiththan leaves
Scientific name : Cyleapeltata
Names in different languages
English name : ink berry
Sinhala name : Kehipiththan

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Tamil : malaitanki, ponmucuttai
It’s a Native climbing shrub which has several medicinal values such as Treatment for
Control Gastritis, bleeding from wounds etc.
 Bee honey
Bee honey use to sweeten the jelly. Honey is particularly healthier than refined sugar.
 Natural flavors
We are going to use natural flavors to give a nice flavor to the jelly. Other than using
artificial flavors it is very healthier to use natural flavors.
Fruit flavors- lemon, apple,pineapple
Other flavor such as vanilla, cinnamon, mint etc.
 Disposable jelly cup
To be more environmental friendly we are going to use a decomposable cup for packing
because using ordinary plastic cups has lot of environmental impacts.
4.2.2 Suppliers
To ensure greatest profit and quality of product, numerous suppliers of honey, natural
flavours, and packing materials were researched. After the research most suitable suppliers
were selected.
 Kehipiththan leaves
Kehipiththan leaves are going to be collected from selected rural farmers (suppliers) in
Horana area by paying for them. And we are going to encourage them to farm Kehipiththan
plant using organic agricultural methods. We are expecting to provide them, organic manure
and knowledge and guidelines for organic farming etc.
 Bee honey
Bee honey is going to be outsourced from a company like Raj trades
- Raj trade is known for the bee honey, virgin coconut oil, tea and rubber products, pepper
and other spices
 Natural flavors
Fruit flavors including natural fruit colors are going to be purchased from a company like
Kist.
 Disposable jelly cup
Disposable jelly cups are going to be purchased from a company like crystal pack (pvt) ltd.
Crystal Pack is a leading manufacturer of rigid disposable food packaging products.

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4.2.3 Raw material requirement
As our plan initially we are going to produce 1000 jelly cups per week. So we require 60kg of
Kehipiththan leaves and 8 liters of honey to produce 1000 jelly cups per week. The following
table shows the raw material requirement and the anticipated cost to produce 1000 jelly cups
per week.
Description of raw
materials
Weekly required
amount
Unit price of
ingredient (Rs.)
weekly cost(Rs.)
Kahipiththan leaves 60 kg 100 6000
Bee honey 8 litres 500 4000
Natural flavours 500
Cost of packing
material
1,000
Total direct raw material cost per week 11500
Total direct raw material cost per month 46000
Total direct raw material cost per year 552000
4.3 Production process
4.3.1 Production procedure
In order to produce a finalized jelico jelly cup of, there are several steps that need to be taken.
As previously mentioned, there are four items that are fundamental to the production of a
jelico jelly cup: Kahipiththan leaves, honey, natural flavour and cup.
Harvesting
kehipiththan
leaves
Washing
leaves
Grind the
leaves with
water
Extract the
juice of leaves
Add honey
Add natural
flavor
Mixing well Fill in to cups Cooling

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4.3.2 Equipment needed
In jelico jelly production we need machinery for the grinding leaves, packaging and cooling
which is a huge process in the organization. Basic step of this process is grinding
Kehipiththan leaves. To get considerable amount of juice we need to grind lot of leaves, so it
need several grinding machines to increase the efficiency of the process. Then to mixing the
ingredients and fill in to cups and pack we need a packing machine. Then we need a
refrigerator for cooling purpose.
4.3.3 Quality control
As the quality should be maintained at all times of Jelico jelly we will ensure that the quality
of the jelly cups are high and will maintain the standard by testing the ingredients and also
the colouring used for different flavours by chemists to make sure that the issues are
eliminated and that it won’t be harmful to the health of the customers. We will make sure that
all the jelly cups are maintain the standard and quality of the brand and image.
4.4 Labour Requirements
The staff required for the production of Jelico jelly cups will be very small. Since the
cooperative is within its initial stages, a large staff is not feasible. Initially we require only
one person for collect raw materials from farmers, two persons for control and maintain the
production process and one person for selling and distribution of jelly cups.
All new members for the production will be required to have some training of the production
process and business to ensure sustainable quality of business.
Type of labour Number
Wages per
month (Rs.)
Labour cost per month
(Rs.)
Raw material collection 1 20000 20000
Production 2 20000 40000
Selling and distribution 1 25000 25000
Total labour cost per month 85000
Total labour cost per year 1020000
4.5 Fixed Asset requirement, cost and depreciation
The term fixed assets generally refers to the long-term assets, tangible assets used in a
business that are classified as property, plant and equipment.Fixed assets are owned by the
firm and uses in its operations to generate income. Fixed assets are not expected to be
consumed or converted into cash within a year.The fixed assets bring long term benefits to
the company. Here we consider the fixed asset requirement for the production of jelly cups
such as; land, building for storing facilities and other structures, transport items such as two
motor bicycles and one 2ton mini refrigerator truck and production equipment such as
grinding machine, a packing machine and a refrigerator.

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Item description
Unit price
(Rs.)
Number
Total cost / value
(Rs.)
Land 5,000,000
Building 2,500,000
storing facilities 500,000
other structures 800,000
transport item
motor bicycle 350000 2 700,000
2 Ton mini refrigerator truck 3000000 1 3,000,000
other structures
grinding equipment 5000 10 50,000
Refrigerator 75000 2 150,000
packing machine 30000 1 30,000
Total fixed investment requirement 12,730,000
Some assets (mainly tangible fixed assets) degrade with usage or time.To reflect this, the
company will depreciate (tangible assets) these assets along their useful life.Examples of
fixed assets that can be depreciated are buildings, machines and vehicles. The only exception
is land, which is not depreciated (since land is not depleted over time, with the exception of
natural resources). The reason for using depreciation is to match a portion of the cost of a
fixed asset to the revenue that it generates; this is mandated under the matching principle.
Item unit
price
(Rs.)
Number
of units
Value Useful
life
time
(Years)
Deprecistion
value per
unit
Total
Deprecistion
value
Land (Premises) 5,000,000
Building 2,500,000 50 50,000 50,000
storing facilities 500,000
other structures 800,000
Transport item
Motor bicycle 350,000 2 700,000 7 50,000 100,000
2 Ton mini
refrigerator truck (L)
3,000,000 1 3,000,000 10 300,000 300,000
Other structures
Grinding
equipment
5,000 10 50,000 4 1,250 12,500
Refrigerator 75,000 2 150,000 7 10,714 75,000
Packing
machine
30,000 1 30,000 6 5,000 5,000
Total projected depreciation value for first year 542,500

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4.6 Other utilities and costs
Other utilities are what else we need to produce jelly cups other than the basic requirements.
It includes electricity, gas, water, fuel and telephone. Following table shows the requirement
of each utility per month.
Description of utilities Total cost (Rs.)
electricity 8,000
water 3,000
telephone 2,000
fuel 5,000
Total direct utility cost per month 18,000
Total direct utility cost per year 216000
4.7 Total production expenses
The total production expenses include all the expenses related to the production per year such
as total raw material expenses per year, total labour requirement cost per year and total other
utility cost per year.
Expenses category Cost per month
Raw material 46000
Labour 85000
Utilities 18000
Total cost per month 149000
Total cost per year 1788000

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5.0 Management plan
5.1 Form of enterprise and name
Type of company : Private
Type of Business : Manufacturing business
Form of business ownership : Partnership (4 partners)
Name of Brand : Jelico
5.2 Entrepreneur’s profile
Four partners who involve in the business study business and environment degree program in
university of Colombo. Through this degree program all partners getting knowledge about
business accounting, human resource management, and entrepreneurship like subjects which
are important to carry out the business.(See appendix 01)
5.3 Structure
Name of the person Description of the activities and responsibilities
D.M.P.SewwandiDissanayake CEO & Marketing Manager
W.M.K. Kalhara Managing Director
W.C.N.Wijerathne Financial Manager
W.V.Y.Vidyani HR Manager
5.4 Salaries and wages
Category Number Salary per month(Rs.) Total cost per year (Rs.)
CEO 1 50000 600000
Line managers
(Marketing,
production, HR
and Finance)
4 40000 1920000
Note –above managers’ salaries are not considering for the first few years until business
become to a good status and it seeks to share the profits among to managers including
CEO.

22
5.5Activities before operation cost
Item Cost per month (Rs.)
payment to urban council 3000
expenses to be incurred in relation to purchase of fixed assets 10,000
cost of training
organic agriculture practices training 10,000
production training 10,000
Total pre operating cost per month 33,000
Total pre operating cost per year 396000
5.6Total management expenses
Type of management expenses Rs.
Travel and transportation 2000
Telephone (Data fees) 3000
Postage 1000
Stationary 2000
Other 1000
Total management cost per month 10000
Total management cost per year 120000

23
6.0 Financial plan
6.1 Total investment cost
Item Cost (Rs.)
Direct cost
Direct raw material cost
Kehipiththan leaves 24,000
Bee honey 16000
Natural flavours 2000
Cost of packing material 4,000
Direct labour cost
Cost of labour for raw material collection 20,000
Cost of labour for production 40,000
selling and distribution(and marketing) 25,000
Other direct cost
Electricity 8,000
Water 3,000
Telephone 2,000
Fuel 5,000
Indirect cost
Marketing expenses 20,000
Management expenses 10,000
Selling and distribution 20,000
Interest of loan 35,000
Governmental taxes 6,000
Total working capital required 240,000
Item Cost per month (Rs.)
payment to urban council 3000
expenses to be incurred in relation to purchase of fixed assets 8,000
cost of training
organic agriculture practices training 10,000
production training 10,000
Total pre operating cost per year 372,000

24
Cost category Value / cost (Rs.)
Total fixed investment requirement 12,730,000
Total working capital required 240,000
Total start-up investment cost 13,001,000
6.2 Financing plan
Total start-up investment cost(Rs.) 13,001,000
Own / group contribution funds(Rs.) -7,500,000
Funds to be borrowed(Rs.) 5,501,000
6.3 Source of financing
Sources:
 Promoters’ funds including equity (Rs.7,500,000.00)
 Bank lending (Rs. 50,000.00)
 Grants from government agencies for SMEs (Rs.50,000.00)
 Investment already received
6.4 Projected profit and loss statement for first year
Item Year 1(Rs.)
Sale 3,360,000
Direct cost
1. Raw material cost 552,000
2. Direct labour cost 1,020,000
3. Other direct cost 216,000
Total direct cost 1,788,000
Gross profit 1,572,000
Indirect cost
1. Marketing expenses 240,000
2. Management expenses 120,000
3. Financial expenses (Interests) 420,000
4. Total depreciation value 542,500
Total Indirect cost 1,322,500

25
Net profit 249,500
6.5 Break even analysis
Break-evenpointprovide the minimum output that must be exceeded for a business to profit.
(www.wikipedia.org)
Break-evenpoint = fixed cost
selling price - variable cost
per unit per unit
Total startup cost = Total working capital required+ Total pre operating cost
= Rs.240,000 + Rs. 31,000
Total startup cost = Rs. 271,000.00
startup variable cost = Rs 149,000( Variable cost : materials, labour, energy)
Fixed cost = Total startup cost –variable cost
= Rs 271,000 – Rs 149,000
= Rs 122,000
Break-even point = fixed cost
selling price - variable cost
per unit per unit
= Rs 122,000
Rs 70 - Rs 149,000
4000
= 3725.19084unit ~ 3725units
Break even point = 3725 units < Monthly Jelico production = 4000 units
Therefore it can be projected that Jelico organic jelly desert cup production business will
earn some profit.
6.6Financial assumptions
 Start-up weekly production = 1000 units
 Start-up monthly production = 4000 units
 Start-up total labours = 4 labours
 Top managers’ salaries are not considering for first few years and seeking to
share the profits.
 Depreciation for land ignores, as inability to count theuseful lifetime.

26
 Land and building rent also not consider for first 3 years, because it come under
equity category which is CEO’s property.
 Rest of the total initial investments are covered by Rs. 5,000,000.00 bank loan.
 Approximate useful lifetimes abstracted from General depreciation rates guide,
www.ird.gov.nz,
Building 50 years
Motor bicycle 7 years
2 Ton mini refrigerator truck 10 years
Grinding equipment 4 years
Refrigerator 7 years
Packing machine 6 years

27
7.0 Appendices
Appendix 01
Top Management profiles

BUSINESS PLAN FOR ORGANIC JELLY CRYSTAL CUPS MANUFACTURING & SUPPLYING

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