Business-Plan-Final

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Contents
1:EXECUTIVE SUMMARY
2:BUSINESS DESCRIPTION
2.1GeneralDescription..................................................................................................................06
2.2AnalysisofCompany................................................................................................................07
2.3Goals&PotentialsofBusinessandMileStone..............................................................09
2.4UniquenessofProduct ...........................................................................................................11
3:MARKETING
3.1TargetMarket ............................................................................................................................12
3.2MarketSizeTrend.....................................................................................................................12
3.3OperatingBudget .....................................................................................................................13
3.4Competition.................................................................................................................................17
4:MARKETING PLAN
4.1MarketingStrategy...................................................................................................................18
4.2Pricing.............................................................................................................................................21
4.3Promotion....................................................................................................................................22
5:OPERATIONS
5.1IdentifiedLocation................................................................................................................... 26
5.2ProductionPlan..........................................................................................................................27
5.3SourcesofSupplier....................................................................................................................30
6:MANAGEMENT
6.1OrganizationalStructure.........................................................................................................32
6.2ManagementTeam.................................................................................................................33
6.3LegalFormalities........................................................................................................................35
7:CRITICAL RISK
7.1Problems&PotentialProblems...........................................................................................39
7.2RemediesandSolution...........................................................................................................40
8:HARVEST STRATEGY
8.1TransferofAssets......................................................................................................................41
8.2IdentifiedSuccessor..................................................................................................................41

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9:FINANCIAL
9.1Profit&LossStatement..........................................................................................................43
9.2BalanceSheet..............................................................................................................................44
9.3CashFlows ..................................................................................................................................45
9.4Break EvenAnalysis..................................................................................................................46
10:MILE STONE SCHEDULE
10.1CompanyActivities................................................................................................................47
10.2Relationshipof Events...........................................................................................................47
11:Appendices &References

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Executive Summary
ChocoLand isstartinga businessofmanufacturing chocolates thatoffers “TastethatallTakes” ina
varietyof flavorsthroughorganic chocolate barsand truffles. Company willfocustocapture customers
bysatisfyingtheirneeds. Company’s brandnamewillbe“Chocolatiers”.
Our companywillbesole proprietorship. CompanyHead Quarter willbeat3rd
Floor, Tower-B World
TradeCentre, Clifton Khayaban-e-Roomi, Karachi Pakistan.Our manufacturing plantwill beatDP
39/sector12D,North Karachi IndustrialArea, Karachi, Pakistan.
Thepopulation ofKarachi isapproximately 23.7millionconsists82%populationof youthandchildren.
ChocóLand willtarget youthandchildren because theyaremorelikelytoprefer chocolates morethan
anyother confectionery. Itisnotjustthetastebutalsopeopletasteiton thecelebration occasions.
Company segmentation ofthemarketforchocolatiers isbased onthreethings.Geographically,
chocolate aresegmented byconsumer preferences inthearea andaresoldinthatregions which
consumemoresnack food. Theother segmentisthegiftsegment. Givingchocolates asgiftsisatrend
thatisfastcatching upinPakistan.Thelastsegment of marketisincomebecauseincomegroups are
ready topayforchocolates.
ChocoLand willoffer a widevarietyofChocolates indifferent flavorsthatwillfulfill consumerneeds.
Our productsareactual productthatwillgivebenefits toourconsumers throughqualityassurance and
stability.Companywill beoffering fiveproductsthatwilltarget children andadults.
 Chocolatiers Crunch Bar (40g)
 Chocolatiers Coconut Bar(30g)
 Chocolatiers Caramel Bar(20g)
 Chocolatiers Dry fruits Truffle(8.9g)
 Chocolatiers Vanilla Truffle(8.9g)
Thecore competencies and uniquesellingproposition onwhich ourcompany willbecompeting are
quality,stabilityandinnovation.
Themarketing planof thecompany willbebasedon marketingmix, pricestrategy, advertising
campaign and promotionstrategy.Company willspend 1milliononadvertising andsalespromotion
over theend ofyear. Company willfocus lower prices ascomparetoitscompetitors topenetrate in
themarket andreduce theweight butnever increasetheprices.

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Inadvertising campaign, company willimplement 5M’sofadvertising thatwillspread themessageof
ourcampaign through television, internet, printmedia andbillboards. In television, entertainment
channels and news channel willprefer foradvertising. In onlineinternet, company willfocus onsocial
media likefacebook andtwitter. In starting,companywill use75%reach ina shorterperiod oftime
because companywants tocreateawareness about itsproduct andbuildcustomer loyalty.Company
willusepushstrategy.Company willdistributeitsproduct throughwholeseller toretailer and retailer
tofinalcustomer.
Inoperational budget, company haveestimated itssalesthrough linear linemethod forfuture, and
havedescribed billof material anditsexpense andestimated market share. Inoperation department
wehavedescribed about ourplant, itsproduction capacity andmachineries which willusefor our
production. Company havedescribed chocolate production process,source ofraw materialsand total
capacity ofemployess withskilledand unskilledlabor.
Inmanagement, company haveincluded ourcompany structure, company ownership, company
monthlysalarystructure, management keypersonnel and legal formalitiesand acts.In legal formalities
includes salestax, incometax, payment ofwages act, environmental protection act, central excise,
employment insuranceact andfood processing act.
InFinancial Plan, company willproject theprofit andlossstatement, pro-forma balance sheet, cash
flows statementfor 2years andbreak-even analysisofourbusinessfor future. Two years projected
incomestatement willshowprofit ofthecompany, pro-forma balance sheet willproject company
positionduringtwo years, cashflow statementwill showtheinflow and outflow ofcashof the
company andbreak-even analysiswill tellaboutthenoprofitno losspointduring theproduction
process.
Atlast,company havediscussed itsharvest strategyinwhich how totransfer itsassetstoitssuccessor,
andwill havedefined theproblems, criticalriskanditsremedy which cancreate inthefuture. Also
discusscompanymilestoneand activitiesand theirrelation witheach other.

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Business Description
GeneralDescriptionofBusiness:
Chocoland isstartingalocal chocolate manufacturing company thatoffers “TastethatallTakes” ina
varietyof flavorsthroughorganic chocolate barsand truffles. Company willfocustocapture values
fromcustomers bysatisfyingtheirneeds. Companyprovides premiumchocolates andtruffles ina
hygieneand clean atmosphere, serving82%population ofchildren and adultsinKarachi.
BrandName:
Company’s brandnamewillbe“Chocolatiers”
Taglineofthe Company:
“TastethatallTakes”
Location:
Company HeadQuarter willbeat3rd
Floor, Tower-B World TradeCentre, Clifton Khayaban-e-Roomi,
Karachi Pakistan.
Our manufacturing plantwillbeatDP 39/sector12D,NorthKarachi Industrial Area, Karachi, Pakistan.
Contact number:+922139992273-79
Email Address:chocoland@gmail.com
Website: www.chocoland.com
Fax:39992273

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Analysis of Chocolate Confectionery
Threat of New Entrants:
 StartupCostishighduetopurchaseofbusinesspremises and plantmachinery .
 Advertisement costwillbehighduetoadditional marketingof theproducts inthestartofthe
business.
 Highlevel ofcompetition fromthewell established brands.
 Required well defined distributionchannel.
 Need special requirement and regulation forfood industry.
 Costoflegal requirements suchregistration ofcompany,
 Potential ofnew entrants ismoderate.
Threat of Substitute Products:
 Thethreat ofsubstituteproductsintheconfectionery industryishigh.
 Thechocolate industrymustcompetewith numerous substituteproducts suchasbakery
items,sweets, ice-cream thatcan threaten theindustry’sprofitability.
Bargaining Power of Suppliers:
 Bargaining power ofsuppliers ismoderate.
 Thesuppliers ofthechocolate and cocoa industryhavesignificant bargaining power over the
industrybecause ofthelimited numberof thesesuppliers.
 Inchocolate industry,thebargaining power ofthesupplier groupisthedependency ofthe
industry’sproducton thesuppliers’ product. Ifthesupplier’s productisnotavailableordoes
notmeet thequalitythen theindustrywillsuffer greatly.
 Company purchases hugeamountofraw materialsespecially cocoa from suppliers.
 Marketdo notcontainsubstitutethatincreases thebargaining power ofsuppliers.

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Bargaining Power of Buyers:
 Largevolumeretailers can bargain forlower prices andreduce theindustry’sprofits.
 Thechocolate industryhasadifferentiated product,which reduces thepower ofbuyers.
 Buyer’s switching costsinthechocolate andcocoa industryis moderatetohighbecause ofthe
differentiated products.
 lackof threatof backward integration
 Departmental storesarethemaincustomers.
Intensity of Rivals:
 Thechocolate industryisamaturemarket thatslowlygrowthincreases therivalryamong
competitors inthechocolate industry.
 Chocolate industryhasboth highfixed costsandhigh storagecosts.
 Highexit barriers.
Alloftheseconditions createpricewars, advertising battles,new product linesand higher qualityof
customer serviceinthechocolate industry.

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Goals and Potentials of Business
Primary Goals:
 To increasethewealth ofowners.
 To increasetheprofitabilityandgrowth ofthecompany throughuseof advancetechnology.
 To providethequalityproductstothecustomers.
 To gainthehighest marketshares forpenetration intheindustry.
Secondary Goals:
 Ensurehygieneand clean working environment astocontinuetoproducesafeand tasty
products.
 To compliancewithall employmentlaws ofthecountryandavoid childlabor.
 To dosomewelfare for thesociety.
 Gainconsumer confidence andloyalty.
 Develop differentiated producttoachieve profitablegrowth inChocolateconfectionery.
Company Values:
Quality:
Quality assurance attractsthoseconsumers who arehighlyconsciousabout theirhealth. Companywill
providebestqualityproductstotheinterest ofconsumer inhygieneand clean working environment
tomeet thePakistanStandard andQuality Controlled Authorityandalsoregistered through ISO22000
and9000.
Research and Innovation:
Innovation willcreate valuestoourconsumers. Developing innovativeresearch and production
processes willgain new longtimeconsumers of thebrand andmaintainhigh consumer retention. Our
researchers will focusonthecreation ofhigh qualityproducts,carefully developed according tothe
nutritionalvalues andpositioning sothatconsumers can maintaintheir dietaccording totheir needs.

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Products and Services:
Chocoland will offer awidevariety ofChocolates indifferent flavorsthatwill fulfillconsumer needs.
Our productsareactual productthatwillgivebenefits toourconsumers throughqualityassurance and
stability.Companywill beoffering fiveproductsthatwilltarget children andadults.
 Chocolatiers Crunch Bar (40g)
 Chocolatiers Coconut Bar(30g)
 Chocolatiers Caramel Bar(20g)
 Chocolatiers Dry fruits Truffle(8.9g)
 Chocolatiers Vanilla Truffle(8.9g)
Augmented Product:-
Quality orpurecoca isChocolatiers augmented product.
Packaging:
Company willfocusmainlyon packaging because lowqualitywrapping can change flavorinthe
chocolate. Effective packaging willattracttheconsumer andcan protectthechocolate anditsquality
andflavor. Our chocolate willpackunder thetwostepsbefore sellingtothecustomers. Stepswillbe:
Wrapping:
Company willbewrap chocolates andtruffles tightlyinnew aluminiumfoilsotheydo notabsorbdyes,
flavorsorodors fromthepaperboard orfromtheenvironment. If thechocolates willnotwrap in
aluminiumfoil, theirtastemaysuffer. Chocolate isabletoreadily absorbodors, soanimpermeable
layer suchasfoilisimportant.The foilalsoretains thevolatileflavorsinthechocolate.

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Labeling:
Thelabeling of thechocolates andtruffles willbe according toflavors. Chocolatiers Crunch Flavorlabel
willhalf darkblueandhalf darkbrown. Caramel Flavorwillbehalfdark bluewith honeycolor
according toyellow caramel. Crunch Flavorlabel willbrown incolor.
On thefrontsidetherewillbeproductnamewithwhiteincolor andonthebackside, therewill be
ingredients and nutritionalfactsthatwe mention. Vanilla andDry fruitstruffleslabel will bebrown and
whiteincolor.
UniqueSellingProposition:
Uniqueness of ourproductslies inFlavorsandStability.
Flavors:
Chocolatiers will giveahugecompetition toitscompetitorsthrough flavors. Company willgive"Taste
thatallTakes" indifferent flavorswithbest qualitysuchascoffee, caramel, crunch, dryfruitsand
vanillaflavor toourcustomers. Usingbestqualityof cocoa willenhance flavorsof chocolates.
Chocolatiers will bedefining tasteofchocolate andwill perfect for treating yourselfand sharingamong
familyand friends.
Stability:
Thestabilityofchocolate madefromtwodifferent cocoa powders and skimmilk.Highlystable
chocolate madefromenvironmentally sustainableingredients thatwillprovideamoreflavorful
alternativetochocolate consumers inthePakistanconfectionery market.

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Market Research and Analysis
Market Segment:
Thesegmentation of themarket forchocolatiers isbased onthreethings. Thefirstonebeing based
geography. Geographically, chocolate aresegmented byconsumer preferences inthearea andare
soldinthatregions which consumemore snackfood.
Theother segment isthegiftsegment. Givingchocolates asgiftsisa trendthatisfastcatching upin
Pakistan.
Thelastsegment ofmarket isincomebecause incomegroupsareready topayfor chocolates.
Target Market:
Thepopulation ofKarachi isapproximately 23.7millionconsists82%ratioofYouth andchildren. Chocó
Land willtarget youthandchildren because theyaremorelikelytoprefer chocolates morethanany
other confectionery. Itisnotjustthetastebutalsopeopletasteitonthecelebration occasions.
Market Size and Trends:
Anew report predictsthattheglobalchocolate market willgrow to$98.3billionin2016fromthe
$83.2billion itwas atin2010.Currently, Asiaisdriving salesinthemarket because ithas lower
penetration andisexpected tohold a20%shareof themarket in2016.Specifically, sales intheAsian
region areexpected toincrease to$19.7billion in2016,fromthe$15billionitwasatin2010. The
marketinAsiaisexpected tohaveahighCAGR of4.7%duetolower penetration.
Pakistanchocolate confectionery isexpected togrow byavalueCAGRof 7%atconstant2014prices
duringforecast period, which isin linewiththevalueCAGRof6% atconstant2014prices duringthe
review period theincrease ingrowthrateisattributabletothe penetration of chocolateconfectionery
intheadult segment. Increasing numbersof adultsareconsumingchocolate confectionery asmore
brandscontinue totarget themintheir marketing campaigns.
Thesurveydata hasbeen explained inAppendix Awithsupporting graphs.

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Operational Budget
Sales Forecast:
According tothechocolateconsumption surveyin2014,Children age1to15consume3chocolates
dailyand theirconsumptionratio is93%and adultsage16to35yearsconsumption ratiois90%.
InKarachi, thepopulation isestimated23.7millionand thesizeof thepotential marketisestimated
20.6million.ChocoLand estimated 4millionpopulation willbetarget monthlyinKarachi.
Sales Projection of Chocolate through Linear Regression Line:
Thelinear regression lineisoftheform Y=a+bX, whereY isthevalueofthedependent variablethat
wearesolvingfor,asistheYintercept, bistheslope, andXistheindependent variable.
Prediction ofsales: Y =a+bX
Y=estimatedsales
‘a’ = unitssales
‘b’=change insales
‘X’=marketfactor
Sales =64500000+1000000(1.5)
=66000000sales
Chocoland will saleestimated 800000unitssemi-annually andareprojected togrowto2millionatthe
end ofthe yearand toover2.5millionin2017and 4millionin2020.The Company’s production
capacity, and thedistributionagreements already inplace, thesearereasonable projections.
Advertisingand salespromotionwill enhance oursales thatwill bebeneficial forourcompany.
Manufacturing units 2017:
Projected sales: 2700000units
Add:Proposeending (11.1%) 300000units
GoodRequirement 3000000units
Less:Opening Inventory (500000)units
UnitsProduce 2500000units

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Prices of Raw Materials
ChocolateDriedTruffle(8.9g)625000Units/Year:
S.no Ingredients Quantity (KG) Rate (rupees)
1
Fig paste ( 0.9g)
562.5 1571
2
Raisin Paste(0.7g)
437.5 748
3
Orange concentrated(0.1g)
62.5 3000
4
Vanilla Essence(0.26ml)
162.5 5000
5
Sea Salt(0.03)
18.75 170
6
Dried Almonds(0.7g)
437.5 2800
7
Coconut Flakes(0.5g)
312.5 991
8
Almond Milk (2.2ml)
1375 500
9
Cocoa (2.8g)
1750 1149
625000*20=12500000
ChocolateVanillaTruffle(8.9g)625000Units/Year:
1
Milk Powder(1.5g)
937.5 300
2
Granulated Sugar(0.45g)
312.5 275
3
Cocoa Powder(1.9)
1187 1149
4
Vanilla Essence (0.9)
562.5 5000
625000*20=12500000

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ChocolateCrunchBar (40g)250000Units/Year:
1
Cocoa Powder 7.16g
1790 1149
2
Coconut Oil 18g
4500 1413
3
Maple Syrup 12.5g
3125 3638
4
Rice Cereal 4.6
1150 1100
5
Pinch Salt 0.06g
15 170
250000*100=25000000
ChocolateCoconutBar(30g)250000Units/Year:
250000*30=7500000
1
Sugar 1.04g
260 275
2
Cocoa Butter 3.68g
920 896
3
Pecans 4.91g
1227.5 2000
4
Cocoa Powder 4.91g
1227.5 1149
5
Condensed Milk 8.25g
2062.5 648.5
6
Coconut Flakes 7.37g
1842.5 991

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ChocolateCaramelBar (20g)250000Units/Year:
1
Heavy Cream 0.15g
37.5 1402
2
Caramel 3.78g
945 2230
3
Rolled oats 4.72g
1180 411
4
Brown Sugar 3.3g
825 275
5
Baking Soda 0.22g
55 381
6
Salt 0.11g
27.5 170
7
Butter 5.15g
1287.5 790
8
Cocoa Powder 2.54g
635 1149
250000*28=7000000

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Competitive Analysis
Competitive
Factors
Cadbury Mars CandyLand ChocoLand
Unique Selling
Proposition
Flavors
Flavorsand
Quality
Quality
Stabilityand
Innovation
Products
Dairy Milk,Fruit&Nuts,
Dairy MilkCaramel
Marsand
Snickers
Paradiseand
Sonnet
Chocolatiers and
truffle
Price (20g-50g) 20-40
50and
above
20 20–100
Company size VeryLarge Large Moderate Moderate
Market Share 19% 7% 10% Estimated 15%
Expiry Duration 1year 1year 1year 1.5years
Promotion AdvertisingCampaign
Advertising
BillBoards
andTVC's
Advertisingand
salesPromotion
Personal
selling
Quality level High Good Low Best
Indirect Competition:
Sincethetarget audience includes, consumers of notonlychocolates butalsoofbiscuitsand
confectionary productsliketoffees, candies etchave proved tobeindirectcompetition (however
would belimited sincewearetargeting smallsegment).
Theestimatemarketsharewiththesupportinggraph isexplained inAppendix B.

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Marketing Plan
Marketing and branding of Confectionery will play a key role in the mobilization of
targeted number of customers. Major marketing options include, site advertisement,
cable ads and handbills among other traditional marketing channels.
The basic principle of marketing is to sell the right product, at the right price and
promote it in the right place to the right people. The job of the marketer is to control
these 4Ps. However, there are other socioeconomic factors, which also affect the
production, selling and consumption of foods.
The success of marketing is often determined by the extent to which various socio-
economic factors are considered. Market research is a useful tool for assessing the
attitudes and behavior of potential consumers.
Marketing Objectives:
Some of the objectives of our business are as stated below:
 To increase sales each month
 To achieve a market share of 15% within the first 18months of operation
 to achieve at least 75% customer awareness of our product in our target market
 To gain customer confidence within the first 12 months.
MarketingMixStrategy:
Marketing MixisalsoknownasIntegrated Marketing or4p’sofmarketing. Wecan understand the
marketing mixstrategyof Chocolatiers bydiscussingthefollowing fourP’sofmarketing.
Product:
Chocolatiers Chocolate ismadefromreal chocolate. Itsingredients includecocoa butter andfullcream
inchocolates and truffles. ChocóLand willbuy4400litersof freshmilktomakechocolates and truffles.
TheStrategy ofChocoLand chocolatiers and truffleswill beimproving inthequalityand features of
product continuously. Our corevalueistogivequalityassuranceand innovativechocolates exceeding
consumer’s expectations which havecompetitiveadvantagefrom thecompetitor’s productsand itwill
enhance thegoodwillof thecompany.

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Price:
Itisanimportantelement ofthemarketingmix. Thepricefora chocolates and trufflescan determine
whether aconsumer willbuyitornotitcanbedetermined easilyand willtellabout thatprice is
reasonable ornot.
Thestrategyof Chocoland for chocolates and truffleswill chargethereasonable andaffordable price
fromitscompetitorsbecause thevisionof ChocoLand istastethatalltakes indailylife. ChocoLand will
charge fewer pricefrom itscompetitors andwillprovidebetter qualityalso. Companywill use
penetration strategybecause willhavelowprices ascomparetoits competitorsand havelonglife
cycleofproduct. ChocoLand want tosurviveforlongrun inthemarket.
Placement:
Theplacement strategyofChocoLand willsell thechocolates andtruffles atevery corner shop, super
stores,bakers shopand even medical storesalsoincluded init.Our maincustomers willbe the
departmental stores.Chocoland wantstoprovidechocolates toalltypeand classofcustomers
because thecoreobjectives ofthecompany istastethatalltakes. Itwillpossibleonlywhen our
chocolate willbeinevery corner.
Promotion:
Thepurposeofpromotion istocommunicate directlywithactual and potentialconsumers. In order to
encourage them topurchasechocolates theChocoLand willusedifferent promotional tactics.
Chocoland will usepressand electronic media tomotivatethepotential andinspires theactual
customerstopurchase theproduct ofChocoLand.
Promotionisimportanttoolofmarketing mixbecause ifitwillnotwell planthen company willunable
toincrease itssales. Companywill giveincentives ondifferent celebrations and occasionsthatwill
inspirethechildren topurchasetheChocoland chocolate. To encourage theyouthcompanywill hire
thecelebrities for advertisement oftheproductswhich willinspirealltypeof consumers.

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Distribution Channel
Company willadoptpushstrategy todistributeitsfinal goodsandservices.

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Pricing Strategy
Thestrategyof Chocoland for chocolates and truffleswill chargethereasonable andaffordable price
fromitscompetitorsbecause thevisionof ChocoLand istastethatalltakes indailylife. ChocoLand will
charge fewer pricefrom itscompetitors andwillprovidebetter qualityalso. Companywill use
penetration strategybecause willhavelowprices ascomparetoitscompetitorsand havelonglife
cycleofproduct. If thecompany willnotgiveitsproduct inlowprices company willreduce product
ratebutwillnever increase theprices. ChocoLand want tosurviveforlongrun inthemarket
Our pricingstrategies areasfollows
Weight Prices
10gmpack, Rs.20
20gmpack, Rs.28
30gmPack, Rs.30
40gmPack, Rs.100
Cost Plus Pricing:
Pricing methods which are based on the cost structure of ChocoLand that are favoured
by accountants because they are supposedly more accurate and reliable.
ChocoLand istryingtomaximizeitprofits.Thismethod workssuccessfully because allcostsneed tobe
accurately accounted. Inmanyfirmsthisisa verydifficult processwhich iswhythesimpler
mark-up procedure isused. Costpluspricing tendstoignorethedemand for theproduct andthe
competition.

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Promotion
Thesales ofproductinthemarketdepend uponadvertising which isoneof thefactors thatbooststhe
salesof theproduct inthemarket. Advertisingcan beintheform ofprintadvertising, banner
advertising, advertising onTelevision, radioadvertising andof courseadvertisement onInternet. Over
thelastseveral years internet hasemerged asastrongand successful platformfor advertisinga
product byusing different ways andmethodstoattract theattention ofthecustomers.There are
variouswaystocapture thethoughtprocess, which runsinthemindsof thecustomers, anditisdone
onaregular basisthrough themedium ofadvertising.
Thepurposeofrunning anadvertising campaign istogenerate theinterest ofnew customers intothe
product, andtosustaintheinterest of regular customersintheproduct, sothattheir mindremains
focused onthebrand nameand imageoftheproduct.
5 M’sofAdvertising:
There arefiveM’sof advertisement tounderstand thewhole concept ofadvertisement.
Mission:
Chocoland advertising missionistogenerate theinterest ofcustomersintothe new products. Through
advertising Chocoland primaryobjective willbuildbrand awareness thatwillmakepeople thinkofour
brand firstwhen theywillready topurchaseourproduct. Chocoland willfocus onadvertising
campaign and salespromotionalsotoincrease salesand doubleitsprofit. Insales promotion,
Chocoland will givesomeincentives withitsproduct.
Media Bugdet:
Chocoland will spend1milliononadvertising andsales promotionexpenses. Advertising isacostly
affair and companies havetospend millionsofrupees on it.Companywilladvertiseitsproducts
throughonline, television, newspaper andbillboards. The allocation ofpromotional budget willbe
0.8millionforadvertising campaign and0.2millionfor salespromotion. Inadvertising budget,
company willspend 19%on onlineadvertising, 70%on television, 5%onprintmedia and6%onbill
boards.

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Message:
 MessageStrategy:
After allocating thebudget, Chocoland willformulatethemessagestrategy.This message willshow
who thetarget marketwilland whattheir insightorconsumer motivationwillaswell as
demonstrating whatchocolatiers andtruffles willoffer andhow itwill satisfythetarget market’sneed
over competitorproducts.
Company willchose positioningand brandimage messagestrategy. Acombination ofboththese
strategies together means thatconsumerswill beabletopositiontheproductintheir mindas well as
buildan imageor attitudetowards theproduct. Chocoland willaimtousethesestrategiesbyusing
classical conditioning inordertolinktheattitudeof love,kindness andgiftchocolates onoccasions with
theChocoland chocolatiers bar andtruffles. This strategywillappeal children andadultsasthe
Chocolatiers will beseen asa moreindulgent chocolate that’stasty,pleasurable butalsohealthier than
allother chocolate brands.Thetarget market willseethechocolate asatastetosatisfy thecravings.
 MessageExecution:
Chocoland will establishalinkbetween theconsumer need and ourbrand. Inourstrategy, company
willcreate alinkbetween theattitudeof love,kindness withourproductstotarget thechildren and
young. Companywilluseemotional appeal inthemessagetotargettheaudience thatiftheconsumer
willbeintheattitudeofkindness orhappiness, theywillbuyour chocolate. Company willdothrough
execution techniques suchashumourand dramatization. Humorappeals willusebecause theyare
often thebest remembered astheyattract andholdconsumers’ attention. Thehumourappeals will
alsobecombined withtheuseofdramatization which willtella shortstoryinwhich theproduct isthe
star.Thiswill buildsuspenseanddrama andwilldraw intheviewer intotheactionthatisportrayed.
Media Planning:
Media planning istheseriesof decisions involvedindelivering promotionalmessagetotheprospective
purchasers and/orusers oftheproductorbrand. Themedia plan istheguideformedia selection.
Chocoland will generally incorporate inthemedia planning process.

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Reach:
Chocoland will target82%population ofKarachi thatwill beexposed tothemessagethrough amedia
vehicleover asetperiod of time.
According tosurvey, 60.5%ofpopulation prefers entertainment channels, 25.3% news, 2.3%cooking
and4.3% sportschannels. The sources ofgetting news ratiosare68.3% television, 18.3%internet,
10.3%newspaper and 2.5%radio. Thechildren and adultsprefer timeofadayfor watching news are
nightand afternoon.
Chocoland will decidetoexpose itsmessage throughtelevision, internet, printmedia and billboards.In
television, entertainment channels and newschannel willprefer foradvertising. In onlineinternet,
company willfocuson socialmedia likefacebook andtwitter. In starting,company willuse75%reach
inashorter period oftimebecause company wantstocreate awareness about itsproduct andbuild
customer loyalty.
Frequency:
Company willselect television andsocial mediafor children andadultsbecause usageof socialmedia
andtelevision inyoung generation ishigh. Companywill decidethatthefrequency ofthemessagewill
be2timesinafternoon and3timesinnightand theduration ofthemessage will beat least 30to
50seconds.
Impact:
Advertisingcampaign consistsinitsfocus ontheemotionsof thechocolate loverscompared tomerely
logical sideof marketingand sales.Advertising willimpactdirectly onsales thatwillincrease company
revenue.
 Advertisingwill impactdirectly onsalesthatwillincrease company revenue.
 Advertisingmakes thekidsaware ofthenew products availableinthemarket.
 Advertisingmakes peopletotrytheproduct ifitisbad also.
 Demanding forluxurious life.
 Advertisement encourages thechildren andyouthtopurchase topurchasetheproducts.

25
Media Timing:
Timingof advertisingmessage exposures playsanimportant roleinadvertising campaign
management, specifically media planning. However, when planning anadvertising campaign. The
messagewillbe2timesinafternoon and 3timesinnightand theduration ofthemessage willbeat
least 30to50seconds.
Promotion Evaluation:
Sales promotionsoffer thecustomer extra valueinreturn forpurchases. Theidea isfor customersto
buymoreduringthesales promotionperiod, thereby increasing totalsales. Companywillevaluate the
success ofitspromotionbased onthesales volumeand theassociated costs.
Company willcheck theincrease insales againstabaseline andcalculate additional profitcompared to
what theprofitwould havebeen, had thesales promotionnottaken place. They check foradditional
brand awareness orabetter brandprofilebyperforming customersurveys. Long-term, asuccessful
salespromotion mustresultinbetter sale.

26
Operation Management
Operations management consistsofalltheactivitiesinwhich managers engage toproducegoodsand
services. Itisconcerned with creating, operating and controlling atransformational process thattakes
inputsfromavariety ofresources and produces outputsofgoodsand services, tosatisfycustomer
demand. In achocolate factory, thismeans usinglabour andraw resources, suchascocoa beans, to
makechocolate. Mostof ourprocess ofchocolate makingwillautomatic (donebymachines).
BusinessOperations includes fourkey areas
 Location
 Machinery
 Labor
 Process
Location:
Our manufacturing plant will be at “DP 39/sector 12D, North Karachi Industrial Area, Karachi,
Pakistan.”
Labour iseasilyavailablesincetherearemanysuchlabour contractor availablein Karachi. Wewillget
skilledand unskilledlabour asper ourneed. Technical peoplearealsoavailable easilytomonitorthe
qualityand consistencyof ourproduct.
Details of Land Requirement
Theland required for ourChocolatemanufacturing companyis5,500 squarefeet. Itisonrental basis
andtherentwould be55,000Rs./month

27
Chocolate Production Process
Theproduct willbemanufactured byFullAutomatic Chocolate Production Line(QH200),with this
system,bakingthemoulds,depositing, forming etc. series procedure canbeachieved automatically.
It'savailabletodepositing allshapeofchocolate. Such asdoublecolorfilled-inside, nutsetc chocolate.
Sinceourproduct areplainaswell asnutareadded thismachineisappropriate.
Thismachinecan produce 100-300kgchocolates per hour.Itcan produce chocolates indifferent
shapes .Itcan help toreduce costof chocolates mould. ByProducing Chocolates indifferent shapeswe
can attractallsegments ofmarket.
Theproduction capacity isfullyautomated asmentioned above, sotheneed ofpersonnel is
comparativelessthan othersemi-automatic machine
ChocoLand willadoptautomatic manufacturing systemformaking chocolateand truffleinthe
supervisionof efficient managers. Our chocolate manufactureprocess consistsofcleaning, roasting,
grinding, cocoa pressing, mixingand refining, conching, tempering and mouldingandcooling.
ManufacturingProcess:
Chocolate productionishighlysophisticated computer process controlled process withmuchof the
new specialist machinery. Machines likeaschocolatecooling tunnels, enrobing machines, coating
machines andmoulding machines.
Cleaning:
When seeds arrivetofactorythey arecarefully selected andcleaned bypassingthrough abean
cleaning machinethatremoves extraneous materials. Different bean varieties areblended toproduce
thetypical flavorof chocolateof particular producer. Then thebean shellsarecracked andremoved.
Crushed cocoa beans arecalled nibs.
Roasting:
Thebeans arethenroasted todevelop thecharacteristics chocolate flavor ofthebean inlargerotary
cylinders. Theroastinglastsfrom30minutesto2hoursatveryhightemperatures. Thebean colour
changes toarich brown andthearoma ofchocolate comes through.

28
Grinding:
Theroasted nibsaremilledthrough aprocessthatliquefies thecocoa butterinthenibsand forms
cocoa mass.Thisliquid masshasdark browncolour, typical strongsmellandflavor andcontains about
54%cocoa butter.
Cocoa Pressing:
Partofcocoa massisfed intothecocoa press which hydraulicallysqueezes aportionof thecocoa
butterfrom thecocoa mass,leaving “cocoa cakes”. Thecocoa butter isusedinthemanufactureof
chocolates; theremaining cakes ofcocoa solidsare pulverized intococoa powders.
Mixing and Refining:
Ingredients likecocoa mass,sugar, cocoa butter, flavouringsand powdered orcondensed milkformilk
chocolate areblended inmixers topastewith theconsistency ofdough forrefining. Chocolaterefiners,
asetof rollers, crushthepasteintoflakes thataresignificantlyreduced insize. Thisstepiscriticalin
determining how smoothchocolateiswhen eaten.
Conching:
Conching isaflavor development process duringwhich thechocolate isputunder constantagitation.
Theconching machines, called “conches” havelargepaddles thatsweep back andforththrough the
refined chocolatemassanywhere froma few hourstoseveral days.Conching reduces moisture, drives
off anylingering acidic flavorsand coatseach particleof chocolatewith alayer ofcocoa butter. The
resulting chocolate hasa smoother,mellower flavor.
Tempering and Moulding:
Thechocolate thenundergoes atempering meltingandcooling process thatcreates small,stable
cocoa butter crystalsinthefluidchocolate massandisdeposited intomouldsofdifferent forms.
Properly tempered chocolate willresult inafinished product thathasa glossy,smoothappearance.
Cooling:
Themoulded chocolate enters controlled cooling tunnelstosolidifythepieces. Depending onthesize
ofthechocolate pieces, thecoolingcycle takesbetween 20minutestotwohours.Fromthecooling
tunnels, thechocolate ispackaged for delivery toretailers andultimatelyintothehandsof consumers.

29
Machineries
Details of Machinery and Sources of Machineries:
Theproduct willbemanufactured byFullAutomatic ChocolateProduction Line(QH200),with this
system,bakingthemoulds,depositing, forming etc. series procedure canbeachieved automatically.
It'savailabletodepositing allshapeofchocolate. Such asliquidfilled-inside, nuts,grainsetc. Sinceour
productsareplain aswell asnutritionalgrainsareadded thismachineisappropriate.
The machineries which we have selected can produce 100-300 kg chocolates per hour. It can
produce chocolates in different shapes .It can help to reduce cost of chocolates mould. By
Producing Chocolates indifferent shapes wecanattract allsegments ofmarket.
Theproduction capacity isfullyautomated asmentioned asfollows, sotheneed ofpersonnel is
comparativelessthan othersemi-automatic machine. Thedetail description ofthemachineries isas
follows:
1. Chocolate Production Line:
Thismachinemodel number QJZ-II especial forchocolate pouring anddepositing including
mechanism, electrical controlling. Theproduction flow including mouldheating, pouring,
vibration, cooling, discharge, convey and soon withautomaticoperation. Suitforproducing pure
chocolate, centre filledchocolate, doublecolour chocolate. Granulemixing pouringchocolate,
smoothlysurface, weighing correctly isagoodmachinefor producing highqualitychocolate. The
capacity ofthemachineisproducing 200kgper day.
2. High-Speed Automatic Pillow Packing Machine:
Full-automatic packager is applicable for packing oblong, Quadrate, round, oval and
shaped candies. It functions rapid computer programming and photoelectric
tracing, frequency control for stable and free running, reversible outsize candy
sorting disc enables empty package rate to get optimal effect, excellent
performance, simple operation and high-speed package of the whole machine.The
packaging speed (granile/m) ≤ 800
The dimensions (length-width-height) – 3000×1350×1450mm

30
Production Capacity of the Plant:
Our production capacity of the plant would be necessary to get the cost of equipment
(bean cleaner, roaster, cracker, grinder, refiner/conch - not including
(tempering/depositing/moulding/wrapping) down to 400 kg/day in order to really
jumpstart the growth of the small batch craft chocolate "industry" here in the Pakistan.
Capacity Utilization:
Themaximumproduction capacity of ourplantwould be400kg/dayandwewilltrytoutilize
optimizeresources andourcapacity of utilizationis300kg/day.
Sources of Raw Materials (venders)
Sugar Supplier:
 HabibSugar MillsLimited –Registered Office /Head Office
3rdFloor–Imperial Court
Dr. Ziauddin AhmedRoad
Karachi-75530
Pakistan
Full Cream Milk Powder:
 Pegasus Maritime Pakistan Pvt Ltd
 SUITE# M13 MEZZANINE FLOOR BEAUMONT, PLAZA CIVIL LINE QTR
BEAUMONT ROAD, KARACHI PAKISTAN ON BEHALF OF TAJ, 92-2135632425
TEL EX 92-21356 32
Vegetable Oilor Fat:
 Khadija EdibleOil(Pvt)Ltd, Karachi
 Plot#41,42,43,EdibeOil&MolassesArea NorthWestern IndustrialArea, PortMuhammad
BinQasim, Karachi.
Tel: 021-34730393
Fax:021-34730394

31
Cocoa, Powder, Mass and Butter:
 New Omega Dairy
 Manufacturer, Distributor andSupplier
 Mr.PatrickFernandes
 Telephone: 092-21-2213508
 Fax Number:092-21-2634683
 Address:A.M.5ArshadSquare BurnsRoad, Karachi, Sindh, Pakistan
Emulsifiers and Flavours:
 FarEastern Impex (Pvt)Limited
F.E.I. Center, G-3,
Central Commercial Area, K.C.H.S.U,
Shahra-e-Faisal, Karachi-75350,Pakistan.

32
Management
Company LegalStructure:
Our companywillbesoleproprietorship. MrShafqat willbeChief Executive ofthecompany.
OrganizationStructure –(as per PVTLTDStructure)
Mr Shafqat
(C.E.O)
Finance
Manager
Admin
Manager
Chief Operating
Manager
Account
Executive
Admin
Staff
Production &
Manufacturing
Manager
Marketing &
Sales Manager
Marketing
Executive

33
Management Key Personnel
Chief Executive Officer:MrShafqat
JobDescription:
 Increasing management's effectiveness by recruiting, selecting, orienting, training, coaching,
counseling, anddisciplining managers
 Communicating values, strategies, andobjectives; assigning accountabilities
 Accomplishes subsidiaryobjectives byestablishing plans,budgets, and resultsmeasurements;
allocating resources; reviewing progress;makingmid-coursecorrections.
 Maintainsqualityservicebyestablishing andenforcing organization standards.
 Contributes toteameffort byaccomplishing related resultsasneeded
Finance Manager: Jahanzaib Pirzada
JobDescription:
 Providingand interpreting financial information;
 Monitoringand interpreting cashflows andpredicting futuretrends;
 Developing financial management mechanisms thatminimizefinancial risk;
 Conducting reviews and evaluations forcost-reduction opportunities;
 Managing acompany'sfinancial accounting, monitoring andreporting systems;
 Liaising withauditorstoensureannual monitoringiscarried out;
 Managing budgets;
 Arranging new sources offinance foracompany's debtfacilities.

34
Chief Operating Manager: Danial Ahmed
JobDescription:
 Manageand coordinatealloperational andmarketing, advertising andpromotional staffand
activities
 Conduct marketresearch todetermine marketrequirements forexisting andfutureproducts
 Analysisofcustomer research, current marketconditions andcompetitor information
 Develop andimplement marketing plansand projects fornew andexisting products
 Managetheproductivityofthemarketingplansand projects
 Monitor,review andreport onallmarketing activityandresults
 Determine and managethemarketing budget
 Deliver marketingactivitywithinagreed budget
 Develop pricing strategy
 Deal withmedia andadvertising.
 Manageallproduction activities.
Administrative Manager: MrUsama
JobDescription:
 superviseandcoordinate activitiesof staff
 Interview jobapplicants
 Conduct orientation programsfor new employees
 Administersalaries anddetermine leaveentitlements
 Beinvolved instafftrainingand development, preparation of jobdescriptions, staff
assessmentsand promotions
 Maintainmanagement information systems(manual orcomputerised)
 Provideandmaintainbusiness premisesand otherfacilities, including plantmachinery and
equipment
 Review andanswer correspondence
 Providesecretarial orexecutive services forcommittees.

35
Company Monthly PaymentStructure
Payment Structure Rupees
Chief Executive Officer 95000
Finance Manager 35000
Admin Manager 30000
Chief Operation Manager 65000
Marketing and Sales Manager 30000
Account Executive 20000
Admin Staff 82000
Production Manager 35000
Marketing Executive 20000
Legalformalities:
 We could get DIN (Director Identification Number) which is printed, signed, and sent to
Ministryof CorporateAffairs.
 Geta TAN(Tax AccountNumber) for incometaxes fromIncomeTax Department’s
AssessingOffice.
 Wemustberegistered enroll withEstablishment Act(State/Municipal), Shops, andOffice
ofInspector.
 Weshouldalsoget foodprocess order certificate fromministryoffood processing
industriesand alsodoingasbusinesscertificate required for ourchocolateindustry.

36
Factories Act, 1934
Thisisapplicable toenterprises where thenumber ofemployees is:
Factory means any premises, including the precincts thereof, whereon ten or more workers are
working, or were working on any day of the preceding twelve months, and in any part of which a
manufacturing process is being carried on or is ordinarily carried on with or without theaid of power,
butdoes notincludeamine, subject totheoperation oftheMinesAct, 1923(IVof1923).
Theenterprises covered under theActarerequired tokeep certain records:
 MusterRoll
 Workers Register
 OvertimeRegister
 AdvanceRegister
 Register for Fine
 Register for Deductions
 Register of Wages
 Register of Accidents andDangerous Occurrences
 Bond Inspection Book
 Register of Cleaning and WhiteWashing
 Record ofExamination of PartsofMachinery
Employees’ State Insurance Act, 1938
Itprovidesbenefitsto employeesin caseofsickness,maternityandemploymentinjury and forcertain
othermattersinrelationthereto. TheActalsoprovidesforpaymentofcontributionsbyemployersand
employees at the rates specified in the First Schedule of the Act. The existing rates of employee’s
contribution vary according to wages and the employer’s contribution is exactly double the
employee’s contribution.
Payment of Wages Act, 1936
"Wages" means all remuneration, capableof being expressed in terms of money, which would, if the
terms of the contract of employment, express or implied, were fulfilled,. be payable, whether
conditionally upon the regular attendance, good work or conduct or other behaviour of the person
employed or otherwise, to a person employed in respect of his employment or of work donein such
employment and includes any bonus or other additional remuneration of thenatureaforesaid which
would be so payable and any sum payable to such person by reason of the termination of his
employment.
This Act is applicable to factories and establishments, which come under The Factories Act. The Act
cameintoforceon the28March1937.Itdoesnotapplytothewages amountingtoRs. 1500ormore.

37
Central Excise (CE) 1944:
TheCentral Government is empowered to levy exciseon all articles manufactured in Pakistan except
alcohol, alcoholicpreparations andnarcotics. Theliabilitytodutystartsthemomentanew commodity
ismanufactured. Thereare,however,certain exemptionsgrantedtoSSIunits.However,thereisno CE
onfruitand vegetable products.
Sales Tax:
Sales Tax is a tax levied by theFederal Government under theSales Tax Act, 1990, on saleand supply
ofgoods andservices andon thegoodsimported intoPakistan.
Threedifferent rates in theslabs of 15%’ 17.5% and 20% havebeen maintained. Sales Tax is levied at
the rate of 20% on the import and supply of seventy items as mentioned in Table-1 of the SRO
466(1)/2007 dated 27-06-2007, whereas seven items mentioned in Table-2 of the same SRO
Notification aresubjecttosalestaxattherateof17.5%.Theremaininggoodsorservices aresubjectto
therateof 15%, unlesstheyhappen tobeexemptfromsales tax underthesixthscheduleto theSales
Tax Act, 1990.
The IncomeTax Act, 2001:
The Federal levy on income (Income Tax), with effect from July 01, 2002, is governed by
the Income Tax Ordinance, 2001 and Income Tax Rules, 2002. It is an annual charge on
the taxable income for a tax year if it exceeds the maximum amount that is not
chargeable to tax.“Taxable Income” means total income as reduced by deductible
allowances on account of:
 Zakat paid under the Zakat and Ushr Ordinance, 1980, other than Zakat paid on
adebt, the profit of which is chargeable to tax under the head “Income from
Other Sources”. (such Zakat is an admissible deduction against the profit on
debt);
 Workers Welfare Fund paid under the Workers Welfare Fund Ordinance,
1971;and
 Worker’s Participation Fund paid under the Companies Profit (Worker’s
Participation) Act, 1968.
.
Environmental Protection Act, 1997:
AnActtoprovidefortheprotection, conservation, rehabilitation andimprovement ofthe
environment, for theprevention andcontrol ofpollution, andpromotionof sustainabledevelopment
TheStateAirandWater PollutionControl Board isthebodyresponsiblefor implementing thisAct. The
actisapplicable toallkindsofindustry.

38
Specific Legalities: (FOODPROCESSING)
In addition to thegeneral legal requirements, there area few legal requirements that are specific to
Food Processing Industries. A food processing enterprisehas to comply with several compulsory legal
requirements.
Implementation of these norms with regard to Small and Medium Enterprises is relatively stringent
while cottageand household level units sometimes tend to compromiseon such stipulations. These
lawsinclude:
a. Prevention of Food Adulteration Act: This is the basic statute to protect consumers against
supply of adulterated food. TheCentral Committeefor Food Standards ‘under the Directorate
General &Health Services Ministryof Healthand FamilyWelfare hasspecified thestandards.
b. Milk and Milk Products Order (MMPO): regulates milk and milk products production in the
country. The order requires no permission for units handling less than 10,000 liters of liquid
milkperday.
c. Standard of Weights and Measures (Packaged Commodities) Rules: lay down certain
obligations for all commodities in packed form with respect to their quality declaration. The
Directorate of Weights and Measures under theMinistry of Food and Civil Supplies operates
theserules.
d. Export (Quality Control and Inspection) Act: is operated by the Export Inspection Council and
underthisactmany exportablecommodities havebeennotified for compulsorypre-shipment
inspection unlessspecifically requested bythe importernottodoso.
Total number of employees required at different levels:
Totalnumbersofskilled plusunskilled employeesrequiredin our establishmentwould be15 people.
Who has knowledge, skill and ability to handle and supervise technical work as well as helps in
marketing. Theperson should handlethecritical situations and solvetheproblem on that level or to
report totheimmediatesenior officer.
There is not more than 7 unskilled workers required because the machineries are fully automated
andthere islesswork todomanuallyontheproduction line..

39
Salary of Workers:
Thepay given to theskilled persons areon thebasis of their level and for theposition. So wepay our
semi-skilledas well asskilled employees10000 to12,000permonthsalaryrespectively.Wewillplace
contract based labours and we will make changes in our pay structure as per changes made by
central orstategovernment.
Critical Risk
Company has identified the critical risks that will happen in the future and has given the
remedies of the problems. The following critical risks are as follows:
 Quality Risk:
 Advance technology.
 Sizing of Employees
 Failure of Advertisement
 Demand Fluctuation
 Shortage of Cocoa and Milk.
 Estimated Sales Projection.
Quality Risk:
Quality is the main component that will give a great competition to our competitors.
Quality risk will create in the future because technology which we will use is not a defect
free but it will minimize the quality risk.
Remedy: Company will decide that will use six sigma for quality assurance and will make
the product and system defect free.
Advance Technology:
Utilization of technology is beneficial for every industry but advance technology will
create a problem in future because advance technology will be helpful when company
will have skilled and competent employees to run the technology.
Remedy: Company will give training session to its employees about advance technology.

40
Sizing of Employees:
This is an important aspect for the success of the business and if the employees are
properly trained it will contribute to the image of the business.
Remedy: Right sizing of the employees will maintain in the future because company will
based on automatic machines. There will no need for extra employees.
Failure of Advertisement:
Failure of efficient advertisement may lead to a large part of our target segment which
will be unaware of our product.
Remedy: Company will change its strategy regarding advertisement and will re-
campaign it.
Demand Fluctuation:
Changing consumptions trends is a potential risk to our business. Right now there is a
high demand within the corporate clients for chocolate confectionery however this
might change in the future; there is no guarantee that the trends will remain stable.
Remedy: Company will give sales incentive if demand will decrease and if demand is
high company will increase its product price and increase its production.
Shortage of Cocoa and Milk:
Cocoa and milk is the main raw material and chocolate is based on it. Shortage of cocoa
and milk will create a potential risk for company because their consumption is high.
Remedy: Now company has contracted the supplier of cocoa and milk. But planting of
cocoa and investment in dairy farm can reduce the risk of shortage of cocoa and milk.
Estimated Sales Projected:
If our sales forecast does not occur as expected then our costs will take much longer to
be recovered and it will take more time to pay back the loan taken
Remedy: Company will advertise to increase customer demand and will strength sales
efforts.

41
Harvest Strategy
Theprocess usedbyentrepreneurs andinvestorstoreap thevalueof abusinesswhen they getoutof
it.Itisalsocalled Exit Strategy.
Theprocess involves:
 Capturing value(cashvalue)
 Reducing risk
 Creating futureoptions.
Company willdecide exitstrategy forfuturethattransfer businesstoheirsor selltheirbusiness to
employees, competitors, orothers. Management havealready decided that ifcompany will
unsuccessful and willnotsurviveincompetitivemarket, company willtransfer theassetsof the
business.
TransferofAssets:
Company willtransfer itassetstodesignated familymember. Company willchose onemember ofthe
next generation whoismoreactive, qualified, andinterested inthebusiness.Alltheassetswilltransfer
tothecompany successor whowill runthecompany. Thechallenges comeintheformoffinding ways
toassureequitable treatment forthenon-participating family members, bethey spouseorsiblings.
Company ownership willdividebutmanagement willclearly delineate. Ownership willsplitinto
passiveand activeshares,giving theactivesuccessor thenecessary controlover thebusinessbut
providingan equal economic benefit totheinactiveshareholders.
Strategyforminimizingtaxationona transferofassets:
Company willuseliquiditystrategyfor minimizingtaxationon transfer ofassets.LiquidityStrategies for
acquiring theliquidityneeded for thepayment ofestatetaxes can behandled threeways:
Bydeferral: Estatetaxes onthevalueofthebusinessinterest maybepaid overa period ofupto14
years, ifthebusinessinterestismorethan35percent ofyouradjusted grossestate. The businessmay
beintheformof aproprietorship, apartnership or acorporation. TheIRS willcharge interest atarate
setbylaw.

42
Through buy/sell agreements: Buy/sellagreements can provideliquiditywhen thepurchaser has
funded thepurchasepricewithlifeinsuranceon thedecedent's life. Theother advantages of abuy/sell
agreement includethefactthatit'sanorganized plan forthedispositionof thebusinessinterest. The
buy-sell agreement prevents anowner fromselling hisintereststoanoutsider withouttheconsent of
theother owners. Theycan alsoestablish avaluewhich isalways aproblem inthecaseof aclosely
held business.

43
Financial Statements
CHOCOLAND
PRO FORMA BALANCE SHEET
Jun 30, 16 Dec 31, 16 Dec 31, 17
ASSETS
Current Assets
Bank 1,500,000 1,975,000 7,003,634
Cash 90,000 195,000 285,500
Account Receivables 450,000 562,500 675,500
Inventory 8,300,000 2,905,000 3,505,000
Prepaid Rent 330,000 686,400 743,600
Office Supplies 27,500 27,500 27,500
Total Current Assets
10,697,500 6,351,400 12,240,734
FixedAssets
Machinery 2,523,844 2,300,282 2,076,720
Air Condition 125,000 93,750 62,500
Furniture and
Equipment
336,106 285,690 235,274
Total FixedAssets 2,984,950 2,679,722 2,374,494
TOTAL ASSETS
13,682,450 9,031,122 14,615,228
LIABILITIES & EQUITY
Current Liabilities
Account Payable 1,650,000 1,848,000 2,256,000
Salaries Payable 412,000 453,200 510,100
Total Current
Liabilities
2,062,000 2,301,200 2,766,100
Total Liabilities
2,062,000 2,301,200 2,766,100
Equity
Drawing 67,400 74,140 79,640
Owners Equity 9,916,775 2,900,159 2,267,457
Net Income 1,636,275 3,755,623 9,502,061
Total Equity 11,620,450 6,729,922 11,849,158
TOTAL LIABILITIES & EQUITY
13,682,450 9,031,122 14,615,258

44
CHOCOLAND
PROFIT & LOSS ACCOUNT
FOR THE PERIOD ENDED
June 30, 16 Dec 31, 2016 Dec 31, 2017
Income
Income 25,800,000 38,700,000 83,000,000
Sales Discount (500,000) (1,500,000) (2,800,000)
Net Sales 25,300,000 37,200,000 80,200,000
Less: Cost of Goods Sold: (17,260,255) (25,890,382) (52,870,000)
Gross Profit 8,039,745 11,309,618 27,330,000
Expense
Advertising and
Promotion
605,000 395,000 894,500
ComputerHardware
Expense
35,000 10,000 32,400
Depreciation 111,781 111,781 223,562
Air Condition
Expense
17,510 7,350 16,159
Electricity Bill 455,790 744,210 1,392,000
Rent Expense 330,000 330,000 686,400
Entertainment
Expense
11,377 11,378 24,120
Fuel Expense 135,500 195,500 397,200
Miscellaneous
Expense
156,862 219,606 440,467
office maintenance 11,750 19,975 33,311
Packaging Expense 920,000 1,380,000 4,950,000
Transportation
Expense
760,000 1,160,000 2,131,200
Office Supplies 7,000 9,895 16,900
Repairs and
Maintenance
28,900 22,300 56,320
Salaries Expense 2,472,000 2,472,000 5,438,400
SSGBill 135,000 165,000 330,000
TelephoneExpense 210,000 300,000 765,000
Total Expense 6,403,470 7,553,995 17,827,939
Net Ordinary Income 1,636,275 3,755,623 9,502,061

45
CHOCOLANDPAKISTANLIMITED
OperatingCashflows
NetIncome 1,636,275 3,755,623 9,502,061
Depreciation 111,781 111,781 223562
Stockintrade 8,300,000 2,905,000 3,505,000
AccountReceivables 450,000 562,500 675,500
Payables 2,062,000 2,301,200 2,766,100
Netcashgeneratedfromoperatingactivities (10,923,781) (5,880,481) (7,170,162)
InvestingCashflows
PurchaseofAssets
Machinery 2,523,844 2,300,282 2,076,720
AirCondition 125,000 93,750 62,500
FurnitureandEquipment 336,106 285,690 235,274
NetcashgeneratedfromInvestingactivities (2,984,950) (2,679,722) (2,374,494)
TotalCashFlow (12,272,456) (4,804,580) (42,595)
CASHFLOW (millions)
Dec31,2017June30,16
CASHFLOW (millions) CASHFLOW (millions)
Dec31,2016
CashFlows Statement

46
Break- Even Analysis
Break even analysisisanimportanttechnique totracetherelationshipbetween cost, revenue and
profitatthevaryinglevels ofoutputorsales.
Inthebreak even analysisthebreak-even pointislocated atthelevel oroutputorsales atwhich the
netincomeor profitiszero.Atthispoint,atotalcostisequal tototalrevenue. Hence the break-even
pointistheno-profit-no-loss zone.
Formula:
BreakEven Point =FixedCost/Sales -Variable Cost*100
= 4752000/83000000-59939200*100
= 0.2*100
= 20%
InAmount = 9502061*20/100
= 19004122

47
Oct,15 Nov,15 Dec,15 Feb,16 Mar,16April,16May,16 Jun,16July,16 Sep,16 Oct,16 Nov,16 Dec,16
CompanyLegalDocumentation
MemorandumofAssociation
ArticleofAssociation
PurchaseofPremises
CompanyEstablished
InstallationofPlant&Machinery
Furniture&OtherAssets
HiringofStaff
PurchaseofRawMaterial
ProductionStarted
Packaging
Distribution
ISOCertification
AdvertisingCampaign
Jan,16Activities
CompanyMilestone
Aug,16
Milestone Schedule

48
Appendix A
Market Research and Analysis
Asurveydata collected from different privateand publicplaces, schools,parksand mallsof Karachi,
Pakistaninthemonthof September toDecember, 2014.
According tosurveyondaily consumptionofchocolates inchildren age1to15years, report saidthat
only7%children do nottakechocolate andchocolate containing foods, Whileother93%children
takeschocolate andchocolate containing food dailyondailybases.
Inprofessional adults,90%takeschocolates ondailyorweekly bases whileother 10%do nottakeit.
Innon-professional adults, allthesamples eatchocolates andchocolate containing food onweekly or
dailybasis.
0
5
10
0
4
2
6 6
3
10
1
3
5
2 2
1
3
2 Age 15 to 22 years
Age 23 to 28 years
Age 29 to 35 years

49
Appendix B
EstimatedMarketShare
ChocoLand hasestimated 15%marketsharetobecapture. Now HilalandCadbury captured high
marketshareinchocolate andsweet confectionery inPakistan.
19%
26%
17%
13%
10%
15%
Market Share
Cadbury
Hilal
Ismail Industry
Mars
CandyLand
ChocoLand

50
References
 file:///C:/Users/usama/Downloads/important%20data.pdf
 https://www.census.gov/prod/ec97/97m3113d.pdf
 http://nhsrc.gov.pk/userfiles/file/nhsrc%20pdf%20files/List%20of%20Health%20Laws%20Ori
ginal.pdf
 http://www.ilo.org/dyn/travail/docs/971/Payment%20of%20Wages%20Act%201936.pdf
 http://download1.fbr.gov.pk/Docs/201012211412172902008stax.pdf
 http://www.euromonitor.com/chocolate-confectionery-in-pakistan/report
 http://www.amis.pk/files/PrefeasibilityStudies/SMEDA%20Bakery%20&%20Confectionery.pd
f
 file:///C:/Users/usama/Downloads/chocolate_market_in_pakistan_to_2014.pdf

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