jam business plan
TRANSCRIPT
PROPOSED BY:
ARJUN SAINI 48
SAHIL KATHURIA 27
ANISH SHETTY 54
PRESENTED BY:
PROF. APARNA RAO
S.No CONTENTS
1. Executive Summary
2. Acknowledgements
3. The Product
5. The Making of Jam
6. Market Segment
7. Market Targeting
8. Product Positioning
9. Competition
10. Price
11. Place [Distribution]
12. Promotion
13. Methodology & Data Sourcing
14. Financial Analysis
15. Analysis, Conclusions and Recommendation
.
2
Executive summary
Our project required us to work on “Natural Products from Himachal Pradesh”. Amongst
the new products, we chose “Jams” which was conceived as a new brand to be launched
in the Indian market.
Indian food processing industry has undergone a total metamorphosis in last 5-6 years.
India is amongst the world‟s major producer of food, producing over 600 million tons of
food products every year. India ranks first in the world in production of cereals, livestock
population and milk. It is the second largest fruit and vegetable producer and is among
the top five producers of Rice, Wheat, Groundnuts, Tea, Coffee, Tobacco, Spices, Sugar,
and Oilseeds. And so far, India‟s share in international food trade is a minuscule 1.5%.
Value addition to foods by processing is a mere 8% of total production. Many world
players and MNCs have entered Indian market and the industry has undergone a total
transformation in terms of quality, design and presentation. Indian companies are
consequently finding it intricate to cope up with the pressure applied by foreign
companies in terms of variety and quality. Hence, need of the hour is to present
something novel which can attract the attention of customers.
PING PONG FOOD COMPANY has come up with the idea of introducing 100%
preservative free jam by the brand name ORCHID. Consumer survey was conducted to
assess the feasibility of 100% preservative free jams. About 92% of respondents felt that
they will definitely prefer natural jams.
Now the target segment that company will contemplate will be upper middle and elite
class. Target areas will be affluent sections of Delhi and adjoining areas of Delhi i.e.
principles of NICHE MARKETING will be followed.
Now the constraint facing the company is financial in nature. This will be tackled by
selective distribution and limited promotion.
Having established itself as leader in the target segment on the basis of quality and
efficient distribution, company hopes to widen its area of distribution and hopes to
establish itself as the market leader in imminent years as stated in the mission statement.
3
Acknowledgements
We would like to convey our sincere thanks and acknowledge
the involvement of our faculty towards putting together this
project.
We would to express our sincere gratitude to Prof.Aparna Rao
for her guidance and immense support.
We would also like to thank Chetana’s Institute of Management
& Research for giving us the opportunity to work on such a
detailed business plan.
We would also like to thank Ms. Aditi who gave us all the
information regarding the distribution process.
Last but not the least, we would like to thank all our dear friends
for their unconditional moral support & help.
Analysis of market research
We had conducted a market research to find two things:
1. To identify with the consumer buying behavior of jams i.e. from where, why,
how, when they buy jams, the flavors, packing etc.
2. Secondly we wanted to know the opinion of people about the 100% preservative
free jams.
Sample size: 1200
Age Group
Between 04 - 20
Between 20 - 30
Between 30 - 40
40 and Above
Extent – Delhi and neighboring regions
Gender- Male – 650, Female - 550 Following are the findings of the market research:
Preference for Jams
900 people have jams.
300 don‟t have jams.
Preference for 100% Preservative Free Jams: 80%
Preference of flavor:
Mix fruit, Strawberry, Apricot, Gooseberry, Grapes,
Kiwi and Chocolate.
Packaging
100 gms – 200 people
200 gms – 400 people
500 gms – 600 people
Importance of Various parameters
(Ratings 1 - Most important, 6 - least Important) Taste -- 1 Flavor -- 2 Ingredients and availability –
3 Packaging -- 4
Price –5
Advertising – 6
PRODUCT
PURPOSE OF THE PRODUCT To fulfill the need of people who love to have 100% natural preservative free jams, and
who had to run to far places in order to get it, can now enjoy it through our Ping pong
jams.
SBU - Jams is our Strategic Business Unit
SKU -We have 10 Stock Keeping Units i.e. 5 flavors in two packing 250 gms & 500 gms
FLAVORS
1. ORANGE MARMALADE
Orange marmalade is made with a special kind of
orange, traditionally known as "Seville
Oranges": They are available in the market in
February each year and are accessible only for a
couple of weeks. They are very different from dessert
orange varieties.
Ingredients: 1 dozen oranges
Four lemons
Three pints of cold water
One pound of sugar
Method: Take a dozen oranges and four lemons; cut each fruit in quarters and slice the quarters
through pulp and rind as thin as possible, discarding all seeds. Weigh the prepared fruit,
and to each pound add three pints of cold water. Set aside for twenty-four hours. Let boil
gently until the rind is perfectly tender, then set-aside until the next day.
Weight the material and to each pound add one pound of sugar. Let cook until it thickens
slightly on a cold dish. The mixture will thicken still more on cooling and care must be
taken not to cook it too much. Stir occasionally, while cooking, to avoid burning. Store it
as jelly. With a small, hard-wood board upon which to rest the fruit, and a thin, sharp
knife, the slicing is quickly done. Use all the water designated.
2.FRESH STRAWBERRY
This is an incredibly popular preserve, especially
good on scones. They appear on the market in
April and May each year and this is the best time to
purchase it and keep it in a deep freezer for further
use.
Ingredients Strawberries - 1.5 kg (3¼ lb.) Sugar - 1.4 kg (3 lb.)
Method Makes 2.3 kg (5 lb.)
Lightly crush the strawberries, put them in a pan with the sugar, warm and stir
continuously until all the sugar is dissolved, then boil rapidly until the setting point is
reached.
Remove the scum as soon as possible, but leave the jam in the pan to cool for about 10
minutes, until a skin just begins to form on the surface, then stir the jam gently and pour
it into warm jars. Cover as usual.
3.GOOSEBERRY JAM
Late June is the time to look for the hard green
gooseberries this recipe calls for. The jam can also
be made later in the season, with riper, sweeter fruit.
It will then have a light set and an attractive pale
pink color.
Ingredients Gooseberries -2.7kg (6lb), slight under ripe, topped and tailed Water - 1.1 litres (2 pints) Sugar - 2.7 kg (6 lb.) Butter - 15g (½ oz)
Method Makes 4.5 kg (10 lb.)
Put the gooseberries into a preserving pan with the water and simmer gently for about 30
minutes until really soft and reduced. Pulp it with a wooden spoon or potato masher.
Remove from the heat, add the sugar to the fruit pulp and stir until dissolved, then add the
butter.
Bring to the boil and boil rapidly, stirring frequently, for about 10 minutes. Test for a set
and, when thhee setting point is reeached, take the pan off the heat and skim the surface
with a slotted spoon. Pot and cover the jam.
4.FRESH APRICOT JAM
Ingredients Apricots - 675g (1½ lb.), halved and stoned Water - 300 ml (½ pint) Butter - 15g (½ oz) Sugar - 900g (2 lb.), warmed
Method Makes 1.5 kg (3¼ lb.)
Put the apricots and water in a saucepan and simmer for 10 minutes. Stir in the butter and
warmed sugar until dissolved, then boil for about 20 minutes to setting point. Stir well
and pour into warmed jars.
5. MIXED FRUIT JAM (Strawberry, Apple,, Gooseberry)
Ingredients Strawberries - 1.5 kg (3¼ lb.) Gooseberries - 2.7 kg (6 lb.), slightly under-ripe, topped and tailed Water - 1.1 litres (2 pints) Sugar - 2.7 kg (6 lb.) Butter - 15g (½ oz) Apples – 1.5 kgs
Method Lightly crush the strawberries, put them in a pan with the sugar, warm and stir
continuously until all the sugar is dissolved, and then boil rapidly until the setting point is
reached. Mash the apples and add to this paste. Put the gooseberries into a preserving pan
with the water and simmer gently for about 30 minutes until really soft and reduced. Pulp
with a wooden spoon or potato masher, remove from the heat, add the sugar to the fruit
pulp and stir until dissolved, then add the butter.
Bring to the boil and boil rapidly, stirring frequently, for about 10 minutes. Test for a set
and, when the setting point is reached, take the pan off the heat and skim the surface with
a slotted spoon. Pot and cover the jam.
MINIMUM EQUIPMENTS AND MACHINERY FOR UNIT OPERATIONS
1. Washing of raw materials: a) Rectangular tanks with false bottom of not less than 20
gallons capacity.
2. Washing of bottles: a) Tanks having not less than 40 gallons capacity. b) Bottle washing machine, brushes, racks, trolleys c) Buckets
3. Processing: a) Furnace/ gas stoves b) Vessels/ steam jacket kettle. c) Ladle d) Thermometer, hydrometer, Refractometer.
Refractometer is made for specific ranges of solids. The percent sugar is read directly on
the Refractometer scale and is usually referred to as " degrees brix ". Sixty six percent
sugar is (660 brix). The accuracy of the reading is temperature dependent, so the
Refractometer and the sample should be at room temperature.
4. Fermentation: a) Barrels b) Carboys c) Earthen jars
5. Filling and sealing: a) Mugs / funnels b) Crown cork machines c) Weighing balance
6. Exhausting, processing for cans: a) Tanks with crates b) Double steamer / semi- automatic can sealer c) Cooling tanks with crates/cranes. d) Pressure cookers/ sterilizing equipments e) Incubator / pressure can tester f) Pasteurizer
SAFETY AND SPOILAGE Since jams are packed at high temperatures, they are not likely to harbor harmful food
borne illness organisms. Some mold spoilage may develop if the cap applied is not heated
to a temperature adequate to destroy mold spores. It should be stored in a dry area, away from heat. It needs to be refrigerated once it is
opened. For best results, the content should be transferred into airtight glass jars and
refrigerated after opening. It is best for usage 6 months after the date of manufacturing in
its original seal pack, provided the storage instructions are adhered to.
HYGIENE – the highest priority
Raw Material level Thorough cleaning and inspecting is done before any raw material is passed on to
production. Inspection for microbial contamination, pesticides and fertilizer residues is
done in a sophisticated lab of international standards.
In process hygiene Periodic, standard-cleansing procedures for boiler, ducts and vessels are done under
expert supervision. Personal hygiene of the workers is ensured by antiseptic dips at entry
and exit. Work clothes are cleaned and sterilized in a state of the art facility. Head wear
and mouth piece prevent Contamination by hair or microbes during working hours.
Finished product hygiene The bottles for packing finished products are cleansed and sterilized by an advanced
technique. Caps also pass through a similar process.
All products confirm are accepted by FPO (Indian Food Product Order) standards and are
also open to "Third Party Inspection/ Testing" by an international agency of repute.
PRODUCTION
Rajgarh often referred to as the peach bowl of Asia, abounds in excellent stone-fruit
(apricot, plums, peaches) as well as apples, pears, strawberries, guavas, kiwis, lemons
(highly aromatic gulgul) and wild gooseberries. The fruit used is the very best and the
freshest. Whenever possible, jams are made from originally grown, sometimes even
homegrown fruit. Handpicked and carried up to the factory door by the local farmers.
It is carefully hand sorted and meticulously hand-cut. In most cases, the jams can only be
made once a year when the fruit comes fresh off the trees.
MARKET TARGETING
The market targeting will be done by Single–Segment Concentration: The main segment we are concentrating on is the Households
Target market for Ping pong Jams
HOUSEHOLDS
1. Home Use: For the entire
family
2. Health Purpose: People are say
100% no to products with
artificial flavors and colors &
want to enjoy the pure and fresh
fruits in the form of jams
PRODUCT POSITIONING
We will position our product on 2 main basis:
PERCEPTUAL MAPS
1. Personal perception
Foreign brands Price
Ping pong
Kissan
Quality
2. Preservative Used
Foreign brands
Price Ping pong
Kissan
0 Preservatives 100%
PRICE
PRICING STRATEGY
We are following a Markup pricing strategy Here unit cost for selling Jams, for example a strawberry 500 gm Jam
Raw material = Rs. 10.5, Packaging and bottling = Rs. 7 Margin and tax = 19.2, Transportation and other variable cost = Rs 3.72 Total Unit Variable Cost = Rs. 40.42
Fixed Cost = Rs. 3,81,850 Number
of Unit to be Sold = 38000
Fixed cost / Number of units to be
sold = 397210/46300 = Rs. 8.58
Unit Cost = Rs. 49 Markup 63% = Rs. 30.87
Mark up Price = 49 + 30.87 = Rs. 79.87 or Rs. 80
MARKET SEGMENT We have segmented the market based
on: The Survey conducted &
Price The four variables for segmentation that were taken are: Demographic, Socio Economic,
Psychographic, and Geographic.
1. Demographic:
i) Education: All educated people who understand the concept of
„natural products‟.
ii) Social Class: Our jams will be catered to people of Upper Middle
Class & the Elite class.
iii) Age: No Bar
2. Geographic:
Regarding our new product introducing Jam in the
market we will target elite areas such as taking south,
North & Central Delhi.
3. Socio Economic:
It will include higher income group with monthly income
greater than Rs 30,000.
4. Psychographic:
This will include all the health conscious people who very well understand the
meaning and advantages of “Preservative Free Jams."
SWOT ANALYSIS
STRENGTHS WEAKNESSES 100% Preservative Free Budget Constraint Exotic flavors Limited Coverage
Premium Quality
Niche segment High Price Increasing Health Awareness Competition
Low Awareness
Customer resistance to new
products
Unorganized segment
OPPURTUNITIES THREATS
COMPETITION
Our main competitors in the market are Kissan the jam leader & the other foreign
brands
POSITIONING
STRATEGY
PING PONGS KISSAN FOREIGN BRANDS
Market Leader: Market Leader Doubtful positioning
Dominant position i.e. Large market share, The foreign brands are
one of the only firm
has a strong hold in mainly positioned as
providing
100%
the preservative jams Low fat(sugar) content
preservative jams
category jams.
TIGER COMPETITOR: SELECTIVE Laid-back Competitor
The firm reacts swiftly COMPETITOR: The The foreign brands do
not react quickly or
and strongly to any firm reacts to only
strongly to rival‟s
assault.
Certai
n
type of
move.
attacks. It might
respond to price cuts
but not to advertising
expenditure.
PRODUCT The product will be Brand name, low High price
DIFFERENTIATI differentiated on the price Low sugar content
ON basis of premium Attractive l packaging
quality, no preservatives
BRANDING Self made brand Comes with the Self made brand
company‟s name i.e.
HLL
USP 100% Preservative Free, Good Quality at a Attractive Packaging
Premium Quality with a low price.
high price
PROMOTION
TARGET AUDIENCE
Since “Ping pong” Jams is a premium quality product, priced little high than
other jams, it will be targeted to mainly Elite class & the upper middle class,
especially those who perceive the meaning of “Preservative free” concept.
COMMUNICATION OBJECTIVES
Awareness: The first objective would be to make the target market aware of the
growing need to switch to preservative free foods.
Conviction: It would involve to build conviction amongst the target audience &
convince them that our product is pure and of best quality .
COMMUNICATIONCHANNELS
PersonalChannel:
Our personal channel to communicate our objectives will start one week after the launch
of the product in the market.
Under personal channels we will use:
Advocate Channel: It consists of company salespeople contacting
buyers in the target market.
Through schools, food fairs, haats, stalls at elite departmental
stores
Non Personal Channel:
To promote our product we will use the following non-personal channels:
Articles in Newspapers
Magazines : Columns on Health & Beauty section in Some health
magazines will be sponsored by our Company
Web: A web page. We have tied up with indiatimes.com, & it has
accepted to give us a space on their website for a week for a nominal fee of
Rs 1000
TOOLS OF COMMUNICATION
SALES PROMOTION
Schools are the place where we can focus school students. We will distribute
free Ping pong jams sachets along with our product literature, which will talk
about the concept of “Preservative Free Jam” , why is good for health as compared
to ones existing in the market, the exotic flavours available , and how are they
prepared.
We would initially cater to Five elite schools in the
National Capital Region i.e.
1. G. D Goenka School
2. British School
3. Sri Ram School
4. Vasant Valley School
5. Heritage Schoo
Around 1000 free sachets along with the brochures will be distributed.
Point of purchase Displays and demonstrations:
Under this promotion scheme, we would put special
Stalls at the following places in order to attract the
target segment
1. BIG DEPARTMENTAL STORES:
We have identified 3-4 big departmental/shopping stores
at various places in Delhi. We have spoken to these
departmental stores & they are ready to allow us to install
stalls in front of their stores. In these big departmental stores, generally people of
upper middle class & elite class, comes to do shopping. And that is our target
segment, we will make them taste our jams & at the same time, make them fill a
small feedback form, which will be a very important tool for us to gauge the
attitude of our target market towards our offering.
a) Diwali Mela at Blind School: Every year there is a Diwali Mela organized at
Blind School in Nizamuudin & there too people of our target segment come &
buy products through various schools
b) Delhi Haa: Delhi Haat is another place to market the right
product to the right people. There are lots of people who visit
it in order to buy something distinct & our jams is just the
right thing to catch their attention
c) Crafts Mela at Modern School, Barah
Khamba Road: Crafts mela is another area, where we
can find our potential customers
Clubs like Panscheel Club, Vasant Valley Club every year organize
different fairs at Diwali, Christmas, at that time we will offer jams in assorted gift
packs. During festive seasons, people usually try to find out some new thing to
offer, & our jams will just be something unique to offer.
d) Clubss:
2. PAMPHLETS & BROCHURES: After identifying the place with the maximum percentage of our target population, We will tie up with the
newspaper vendors & local newsletter, to include the pamphlets & brochures to
be included in the newspapers that they would distribute to the people. This
promotion strategy will be carried out on the day of launching the product &
subsequently on every Sunday for 2 months. These pamphlets will talk about our
jams, their specialty, flavors, and the nearby shops where they are available.
3.CROSS PROMOTION: Our Company has tied up with Harvest Gold
Bread Company. During the first month of the launch of our jams, we will
be offering free 10gms jam bottles with each full loaf of
bread, only at few selected places in Delhi i.e. where the
density of our target population market is the maximum.
However this offer will come with the condition “Offer
valid till stocks last ." We will be selling 20,000 sachets at our cost for the
first two months.
Trade shows:In addition to this we will be setting our Jams stall at Annual
India International Tradefair held at Pragati Maidan
PACKAGING AND LABELLING
Packaging gives life to the product. Packaging includes activities of designing and
producing the container and wrappers for the product. It has become an important
marketing tool. Well-designed packages can create convenience and promotional values.
All the existing physical products and the products to be launched in the market have to
be packed and labeled in an attractive manner in order to seek customer attention.
Packaging is considered as one of the important elements of product strategies.
Developing n effective packaging for a product requires several decisions. The first task
to establish packaging concept is to define what the package should basically be for the
product. Then decisions are also to be made on additional elements like size material
brand market etc.
Keeping the above points in view the labels which are to be put on our jam bottles will
give a brief description of our product which will include the ingredients, price, weight,
manufacturing date, name of the company and flavor. The lid of each bottle will have an
FPO mark and batch number.
The jam will be packaged in two different sizes of bottles, which are of 250 gms and
500 gms. The cartons will have a packaging capacity of 12 bottles of 500 gms and 18 bottles of
250 gms.
For the purpose of packaging we will have to incur cost of Rs. 6.5/ bottle of 500
gms and Rs. 5.50 per bottle of 250 gms. The cost of cartoon will be aprox. Rs. 5/
which will include cost of the cardboard box, the material with which the box has to be
covered, and the seal of the company which is to be put on each cartoon.
Self Service: An increasing number of products are sold on self services basis i.e., the
purchases are made on impulse where the effective package operates 5 second
commercial therefore package must perform many of the sales task like attract attention
describe the product features create consumer confidence and make favorable overall
impression.
Consumer Affluence: Rising consumer affluence means consumer is willing to pay little
more for the convenience appearance dependability and prestige a better package.
Company and Brand Image: Packaging should be done in such a manner it
contributes to instant recognition of the company and brand.
PLACE
DISTRIBUTION
Distribution includes delivery of goods from the manufacturer to the retailer. For
this purpose it becomes very essential to have distributors in between them so that
communication becomes easier. Distribution plan focuses on the set of decisions relating to the processes, which are
concerned with the flow of suppliers, components, products, and services between
sources of producer, intermediaries, and the end user.
Manufacturer Distributor Retailer
The manufacturing for our jams would be done in Himachal Pradesh, at Rajgarh. Other
things like processing, packaging and labeling shall also be done at that place.
The bottling of jams will be done at Rajgarh itself for which bottles will be sent to
Rajgarh from Delhi .The sealing of the jams bottles would be of the shrink pack. Then
these bottles will be brought to Delhi and supply to the distributor through CNF
(CLEARING AND FORWARDING)
Manufacturer
CNF
Distributor Distributor Distributor
Retailers Retailers Retailers
Every distributor we supply our jams has their own warehouse and
would supply to their retailers as and when required. The CNF person would
be appointed on behalf of the Company itself, who would take care of the goods received
from Rajgarh and will store it in the warehouse of the Company at Rajori Garden. The total production will be made of 38000 bottles
500 gm 27,000 bottles
250 gm 19300 bottles
The list of Distributors and outlets covered by them is mentioned below. The
taxes and margin given to the Distributors and the Retailers is also mentioned. The places
covered are:
South Delhi
West Delhi
North Delhi
DLF (Haryana)
Noida (U.P)
The Sales tax for Delhi is 8%. The Sales tax for DLF IS 12% The Sales tax for Noida is 8%
CNF person will get Rs. 3000/- per month One Helper with the CNF will get Rs. 1800/- per month The cost of Transportation of L and T Bottles from Hindustan Glass company ,
Chandigarh - Rs. 2000/- for 300 cartons .
The cost of transportation of Jams from Rajgarh to
Delhi- Rs. 2000/- per month for 200 cartons
The cost of auto fare would be Rs.1000 – Rs. 1200/- per cycle That is the cost of auto fare per month on an average would be Rs. 2400/- per month
Distributor will get a margin of 6%
Retailer will get the margin of 10%
FINANCIAL ANALYSIS
REVENUE SHEET
Products Quantity Selling Sales ( Rs.)
(units) Price
(Rs.)
Strawberry 10000 80 800000
500 gms.
Strawberry 250 gms. 7000 45 315000
Mix Fruit 500 gms. 10000 80 800000
Mix Fruit 250 gms 7000 45 315000
Apricot 500 gms. 3000 76 228000
Apricot 250 gms. 2000 44 88000
Orange Marmalade 500 2000 82 164000
gms.
Orange Marmalade 250 1300 46 59800
gms.
Raspberry 500 gms. 2000 76 152000
Raspberry 250 gms. 2000 44 88000
Total 46300 3009800
COST SHEET
Cost
Details Amount (RS)
Manufacturing Cost Raw Materials, Bottles, Packaging 752450
Labor Cost ( Variable ( number of days * Number of 450000
Cost) workers * Cost per worker
(300*10*50)
Electricity, Water Expenses 50000
Transportation cost Chandigarh – Rajgarh = 12*2000 114000
= 24000
Rajgarh- Delhi = 12*5000 =
60000
Within Delhi Auto = 30000
Salary
Distribution Cost Rent- storage Advertising and
promotion Cost
Fair
2 persons = 96000 and 74000 Rs. 170000
Per Annum
Margins to the Distributors @ 6% 180588
Margins to the Retailers @10% 300980
CNF and helper 57600
3000/ - per month 36000
Sachets – 5000 * 3= 15000 30000
Pamphlets – 5000*3= 15000
Dilli Haat, Pragati Maidan 40000
Magazine Health magazine 50000
Web site 4000/- per month 8000
Legal FPO license 250
Other licensing 1000
Accountant 5000
Sales tax person 5000
Tax Sales tax on Jams sold 196960
Miscellaneous Travelling , stationary, postage 25000
expenses etc.
Total 2472828
Profitability
1.Total Revenues Rs. 3009800
2.Total Costs Rs.2472828
Profits/( losses) : 1 – 2 Rs. 536972
Investment
Land lease @ 50000/ per year 1,00,000
Building Setup and various tables, utensils 4,00,000
etc.ment for two years
35000
Freezer
Lug machine 4000
Food warmer 4000
Cash working capital 2,00,000
Total Rs. 7,43,000
BREAK EVEN ANALYSIS The Break Even Analysis is calculated for the purpose of calculating when the
Investment is recovered?
Here the Investment is = Rs. 743,000 for five year and we assume that it is ment for
two years. So every year amount will be 371500 Other Fixed cost ( Electricity , Salaries , Rent , Advertising promotions legal costs ,
miscellaneous costs ) = Rs. 397210
Variable costs ( Raw material cost , Packaging , bottling , transportation, margins to the
distributors and retailers, tax ) = Rs. 2075618
Total Fixed cost = Rs. 768710 Total Revenues = Rs. 3009800
Total Variable Cost = Rs. 2075618 Contribution = Total Revenues – Total Variable
cost = Rs. 934182 P/V ratio = Contribution/
Revenue = 934182/
3009800 = 0.3103
Break Even ( in Rs. ) = Total Fixed Cost/ P/V ratio
= 768710/0.3103
= Rs. 2477312
For future cash flow
I year II year III year IV year V year
sales 3,010 4,214 5,478 6,847 8,559
veriable cost 2,076 2,950 3,670 4,451 5,349
Contribution 934 1,264 1,808 2,397 3,210
fixed cost 397 600 700 800 950
Profit 537 664 1,108 1,597 2,260
cash inflow 696 904 1,388 1,917 2,640
cash out flow 500 850 1,330 1,850 2,600
Break even pont on operating activities
I year II year IIIyear IV year V year
pv ratio 31% 30% 33% 35% 38%
break even point 1280 2000 2121 2286 2533
Margin of safety 57% 53% 61% 67% 70%
Jun- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar-
07 Jul-07 07 07 07 07 07 08 08 08
Sales 301 301 301 301 301 301 301 301 301 301
Variable cost 207.6 207.6 207.6 207.6 207.6 207.6 207.6 207.6 207.6 207.6
Contribution 93.4 93.4 93.4 93.4 93.4 93.4 93.4 93.4 93.4 93.4
Cumulative 93.4 186.8 280.2 373.6 467 560.4 653.8 747.2 840.6 934
Contribution
fixed cost 397 397 397 397 397 397 397 397 397 397
profit/loss - - -
-23.4 70 163.4 256.8 350.2 443.6 537
303.6 210.2 116.8
We hope that above venture will provide enough income and growth so we
collectively make a brand which give smile on every face in the morning .
APPENDIX
QUALITY
Requirements for setting up a Fruit Preservation Factory in conformity with the Fruit Products order, 1955.
1. Application on Form 'A' (Specimen enclosed).
2. Plan of the factory showing the dimensions in meters/sq, meters and operation-wise
area allocation.
3. List of machinery and equipment showing the capacity, horsepower used, number and
source of supply of each machine.
4. Proof of possession of premises.
5. N.O.C. from the local governing authority
6. Water analysis report chemical and bacteriological from Public Health Laboratory.
No person shall carry on the business of manufacture of fruit products except under and
in accordance with the terms of an effective license granted to him under this order.
Category area requirement, annual production limit and license few for one terms or part
thereof (Ref. Clause 5 (2) and part I (B) of the Second Schedule of Fruit products order,
1955).
Category Minimum Minimum Licence fees Annual
area required area required for one terms production
for for storage's of part permissible per
manufacturin and office thereof calendar year
g premises purpose
Cottage scale 60 60 Rs. 250/- Above 10 M.T.
but fees then 50
MT Note: 1. Area occupied by machinery shall not be more than 50% of the manufacturing
area.
2. The minimum height of the factory premises under cottage scale categories is
20 feet and for small scale and large scale categories 14 feet.
Every manufacturer shall manufacture fruit products in conformity with the sanitary
requirements and appropriate standards of quality and composition specified in the
second schedule of this order.
Part 1 (a) Sanitary requirements of a factory of fruit products the premises shall be
adequately lighted, ventilated and cleaned by white washing/colour washing or oil
painting.
The equipments and the factory shall not be used for manufacture of repugnant products
like fish, meat, eggs etc. However, permission may be granted as a special case if
arrangements are made for disinfections of premises after changing from meat products
to fruit products (One month idle gap will be required for change over).
The premises shall be located in a sanitary place with open surrounding, preferably in
industrial area/estates. The premises shall not be used as or communicated directly with
residence.
Adequate arrangements for cleaning equipment's, machinery, containers tables and
raw materials shall be provided.
Copper bias or iron equipment's, containers or vessels are net permitted, in the
preparation, packing or a storage of fruit products, only aluminum, stainless steel, glass
or tin equipment are allowed.
The water used shall be potable and shall be got examined chemically and
bacteriologically by a public Health Laboratory (if no municipal water is available at the
premises). The water sample should be drawn for such examination by the public Health
Authority of the Area where the premises is located or should be drawn in the presence of
the above authority. Free following tap water of 1 kilolitre per day shall be made
available.
Adequate drainage system and provisions for disposal of refuse shall be made.
Wherever cooking is done on open fire, proper outlets for so stroke/steam etc. like
chimney, exhaust fan etc. shall be provided.
The worker engaged in the factory shall be healthy and shall be medically examined,
inculcated and vaccinated whenever required.
The workers shall be provided with aprons, head - wears gloves etc. and shall be
personally nest and tidy.
Qualifications of Technical Staff
Production shall be supervised by a person possessing one of the following,
qualifications:-
Small scale
1. B.Sc. with Chemistry/Agriculture as one of it subject.
2. Diploma or certificate n fruit preservation or a course of atleast 3 months duration
from a recognized institution.
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