product project

Declaration

I undersign kachhadiya Rajan J. The student of M.B.A.

here NR vekaria institute of b.m.s.junagadh. Here by declare that the

Business plan presented in this report is my own work and has been

carried out under the supervision for dr.rajesh patel of NR.vekaria

institute of b.m.s bilkha road junagadh.

This work has not been previously submitted for any

examination to any other university.

Date :-

Student’s Sign

(kachhadiya Rajan J.)

Place :-

PREFACESmall scale industry is a tool for socio-economic growth and

balanced structural development. It is considered highly important for

creating employment opportunity and to develop entrepreneur skills. It

also ensures latter use of scare financial resources and opportunity

technology.

The contribution of small scale industries is 40% in the

economic growth rate of the country. So, it is essential to understand

management and working of small scale industries as a student of

management. Small scale business has been included to create and

development entrepreneur skill among the student.

It is highly essential as a student of management to understand

management of SSI in MBA The subject entrepreneurship and

management of small business are included to give student the

practical knowledge of the student.

Thus we can get clear picture that how to manage small scale

business and how to avoid difficulties in the way. So, I am presenting

Business plan on “cotton seed industry”.

Acknowledgement

I am feeling great pleasure in submitting this project report to you.

Business Plan is crucial function, which must be done by every small

scale entrepreneur before he or she starts production.

I greatly pay my attitude to my supervisor Dr. Rajesh Patel for his

guideline encouragement.

I would like to thank my friends and my family members who

helped me in this project.

Date :-

Student’s Sign

(Kachhadiya Rajan J.)

Place :-Junagadh

Index

Sr.No. Particulars Page No.

1. Introduction2. Project at a Glance3. Bio-data of Promoter4. Basis and Presumption5. Organization structure6. Implementation schedule 7. Location Justification8. Introduction of Product9. Market details of Product10. Details of Raw – Material11. Details of Machinery & Equipments12. Production Process13. Details of Marketing 14. Financial Details15. Profitability of Project16. Ratio Analysis 17. Break Even Point Analysis 18. Risk Factors19. Future Plan20. Conclusion

1 Introduction of small small scale industry

Cottage & Small scale industries facilities in effective

mobilization of resources of capital and skills proper management of

small scale industries leads to maximum utilization of scattered

resources and developing entrepreneur skills

Small scale industry in India provides employment to above 4.4

million people and the large contribute to develop Indian economy.

The government of India is well aware about importance of small scale

industry.all India small scale boards give technical financial and other

guidance to small scale industrialist.

I have got a chance to acquire practical knowledge at the time of

collecting information. I have tried to cover all the relevant points and

have tried to give in the most precise and systematic form.

2 Projects at Glance

1. Name of the Unit :- Shree Krishna industry

2. Address of Unit :- road B/5 Plot no. E-10/B

G.I.D.CMetoda

3. Form of Organization :- Partnership firm

4. Name of the Product :- “Cotton seed cake”

5. SSI Registration :- Applied for

6. Bankers :- HDFC BankICICI Bank

7. No. of Proposed Employees:- 12

8. Cost of Project :- 1,17,75,000

9. Brand Name :- “Anmol cotton seed cake”

10. Accounting Year :- 1st April to 31st March

3 Bio-Data of Partners

Partner:-1

1) Name : - Kachhadiya Rajan J.

Address : - kuldevi krupa

B-5 sahi strit

Kalavad Road,

TA- Rajkot

DR- Rajkot

Rajkot

Age : - 22

Education Qualification : - M.B.A. (Finance)

Financial Contribution : - 60%

Share In Profit : - 60%

Working Responsibility : - In Production & Marketing

Department

Partner:-2

Name :- Ranpariya Rohit

Address :- “Shree Krishna”

9-Patidar Society

University Road,

Street No.1,

Rajkot.

Age : - 26

Education Qualification : - M.B.A. (Finance.)

Experience : - 3 Years in Company

Financial Contribution : - 40%

Share In Profit : - 40%

Working Responsibility : - In Finance & Personal

Department

4 Basis & Presumption

The profile is drawn on the basis of the following presumption.

Working hours per day 20 HrsWorking day 300 DaysTotal no. of working hours 6000 HrsWorking efficiency 80%Labors charges As per wage actRate of interest on fixed and working capital 16%Operative period of the project 12 years

Value of machinery and equipments is estimated on the basis of

prevailing cost of market.

5. Orgenation structure

Partner

GeneralManager

MarketingManager

SalesManager

AriaManager

Labour Clark

6 Implementation Schedule

Project implementation will take a period of 10 months from the date

of approved of the scheme breakup of activities with relative time for

each activity is shown below.

Preparation of project report 1 monthRegistration of SSI 1 weekFinancial arrangement 1 monthPurchase of raw-material 15 monthInstallment of machinery 1 monthElectrification 1 weekRecruitment of staff 15 days

I can start my business with maximum time period of 8 to 12 month.

7 Location Justification

It is very essential that selection of location should be proper because

which directly concern with the success and failure of any company. If

location is proper then, it helps to reduce cost of all infrastructural

facilities like water, power, fuel, row-material, transportation etc. Must

give full consideration to suitable location of his enterprise because

location factors are crucial for profit maximization.

The plant is located at ‘G.I.D.C.’. This area is considered as an

industrial zone and various infrastructural facilities like transportation

facility, power, fuel, water etc. are available easily and national

highway it’s just near by this area.

Here, some factors are given.

1) Raw-Material :~

Raw martial is prime factoring that affect location

of industry. The factory is located near the row

material producing center. Nearness to the source of

raw-material reduces the cost of transportation.

2) Power & Water Facilities: ~

Power is necessary for the process of production

and for transporting finished goods and raw-

material, power may be electrical, diesel and atomic

energy are localized and mobile water is also

available there.

3) Labour :~

Labour are the main element of production, if the

labours are efficient then production would be of

better quality and quantity. As plant is totally

industrial estate this is the main reason , firm will

get the best skilled labours. Machine can’t produce

anything without the availability of skilled labour

4) Market:-

Market is also important factor that affect the

location of industry because if the final product is

marketed as early as possible. So problem of working

capital is lower.

8 Introduction of product

My product is cattle food. Means food for animal. This product

is particularly known as cotton seed cake. This is my main product.

The main raw material of my product is cotton seeds. And during

the production process I also get raw cotton seed oil.

So my products are:-

Main product: - cotton seed cake

Subordinate product: - cotton seed oil (raw)

9 Market Details for the Product

The product is mainly for the animal. We know that in Indian

village, there are so many tamed animals. So the requirement of

cattle food is very high. And the demand of cattle food is evergreen.

My subsidiary product is cotton seeds oil. So the demand of both

my product is high. So I can get market easily.

Target market for my product is the village, where tamed

animal are so many. My product is also healthy for the animal, so

the demand of this product is high.

10 Details of Raw-Material

Raw-material is a prime for the production of the product,

and it is nothing but input which through some processing we can

get finally output.raw material means, which thing you use for final

production.

For the production cotton seeds cake mainly cotton seeds use

as raw-materials.

* Supplier Of Raw-Materials: ~

1). Raj jinnig,

8/G Plot,

Ajar Industrial Estate,

Rajkot.

2). Krishna jinnig Pvt.Ltd.

10/2C, Kalavad Road,

Metoda,

11 Details of Machine & Equipments

In the production of cotton seeds cake mainly following

machines are required.

Sr.No. Name of the Machine

Quantity Price Total

1 X-piller 2 15,00,000 30,00,0002 Nutilisur 1 60,000 1,20,0003 Boiler 1 5,00,000 5,00,0004 Elevator 2 2,00,000 4,00,0005 Cistern 2 1,50,000 1,60,0006 Electric motor 2 5,000 10,000

Total Amount 41,30,000

12 Production Process

Production Process refers to the whole process from raw-

materials to semi finished and then final production.

The production process of my industries for produce cattle food

cake are as under.

The first cotton seeds reach at railing through conver then this

cotton seeds reachat X-piller machine and detached cotton seeds oil

and cotton seed cake the cotton seed oil go at cisten and cotton seeds

cake go for pakageging now final; product is ready.

13 Details Of Marketing

Marketing means the buying and selling activity of products. In

short you can say that, how you sell your final products to the

consumer. Marketing is most important because, if you can produce

your final products but you can’t sell it then your production is

nothing.

* Elements of Marketing: ~

1) Channel of Distribution:-

Channel of distribution means the by which way

you sell your final product.

Our industry adopts two types of channel of distribution.

{A} Direct to the customer

{B} Whole seller to the customer.

2) Advertisement:-

It is the most important for today’s competitive business

for the success of the business the advertisement is crucial decision for

us, and through it you can spread awareness of your product in the

market.

Our industry gives advertisement by,

{A} News Paper

{B} Holdings

{C} Pamphlets distribute in villages.

3) Target Market :-

It is not possible for any businessman to satisfy

all type of human needs and wants by single business. So the

business targets some specific group of people for the particular

product known as target market.

Our industries target market is ‘Farmer’.

4) Pricing Decision :-

Decision concerning price to be followed for a

period fame may be called price policies. Pricing decision has

strategic important in any enterprise. Good pricing policy is always

desired by all organization. Mostly we measure price is the

exchange value of a product or services always express in money.

There are many methods for taking pricing decision.

So our industry decide price on the basis of ‘Going Rate Pricing’. In

this method charging the same price as compare to competitor’s

price.

PRICE 50 kg = 640rs.

14 Financial Details

[A] Fixed Cost: ~

1) Machinery & Equipments :-

Sr.No. Name of the Machine

Quantity Price Total

1 X-piller 2 15,00,000 30,00,0002 Nutilisur 1 60,000 1,20,0003 Boiler 1 5,00,000 5,00,0004 Elevator 2 2,00,000 4,00,0005 Cistern 2 1,50,000 1,60,0006 Electric motor 2 5,000 10,000


2) Total Fixed Capital :-Sr.No. Particulars Amount1 Land & Building 50,00,0002 Machinery 41,30,0003 Pre-Operative Expensive 8,00,0004 Other Expenses 70,000

Total Amount 1,00,00,000

[B] Working Capital: ~

(1) Raw materialSr.No. Particulars Quantity per

tonesRate per tone

Total

1 Cotton seeds 50 10,000 5,00,000


2) Salary of Staff Members :-

Sr.No. Particulars No. Salary Total1 Unit Manager 1 10,000 10,0002 Accountant 1 7,000 7,0003 Peon 1 1,000 1,0004 Machine Operator 1 2,000 2,0005 Skilled Worker 3 2,000 6,0006 Packer 1 1,500 1,5007 Chokidar 1 1,000 1,0008 Super wiser 1 7,000 7,0009 Sales man 2 2,000 4,000

Total Amount 39,500

3) Utility :-

Sr.No. Particulars Amount1 Power 25,0002 Water Supply 2,000

Total Amount 27,000

4) Other Contingent Expenses :-

Sr.No. Particulars AmountPostage & Stationary 1,000Telephone Charges 1,500Repairs & Maintenance 2,000Transportation Charges 15,000Insurance Charges 2,500Advertisement Charges 2,000Sales Expenses 1,000

Total Amount 25,000

5) Total Working Capital :-

Sr.No. Particulars W.C. per Month

W.C. per 3 Months

W.C. per year

1 Raw-material 5,00,000 15,00,000 60,00,0002 Salary 39,500 1,18,500 4,74,0003 Utility 27,000 81,000 3,24,0004 Other 25,000 75,000 3,00,000

Total Amount 5,91,500 17,75,000 70,98,000

[C] Total Capital Investment: ~

Sr.No. Particulars AmountTotal Fixed Capital 1,00,00,000Total Working Capital 17,75,000

Total Amount 1,17,75,000

[D] Sources of Finance: ~

Sr.No. Particulars Total Amount

Loan Own CapitalNilesh Rohit

Total Fixed Capital

1,00,00,000 40,00,000

36,00,000

24,00,000

Total Working Capital

17,75,000 5,00,000 7,75,000 5,00,000

Total Amount 1,70,98,000 60,98,000

66,00,000

44,00,000

[E] Calculation OF Depreciation: ~

Sr.No. Particulars Amount of Fixed Assets

Rate of Depreciation

Amount

Building & Land 49,50,000 5% 2,47,500Machinery & Equipments

15,00,000 10% 1,50,000


15 Profitability of The Project

Particulars AmountTotal Sales 1,50,00,000Less : Variable Cost 20,00,000 Contribution

1,30,00,000

Less :Fixed Cost 75,00,000 Profit Before Tax

5,50,00,000

Less : Tax @ 35% 19,25,000 Total Net Amount

35,75,000

16 Calculation Of Ratio

1) Gross Profit Ratio:

= Gross Profit Sales 100

= 1,80,0002,00,00,000 100

= 90 %

2) Rate On Return On Investment :

= Net profit Total capital 100

= 48, 00,0001, 70, 98,000 100

= 28.07 %

3) Net Profit Ratio :

= Net profit Sales 100

= 48, 00,0002,00, 00,000 100

= 24 %

17 B.E.P. Analysis

Break even point is the abbreviation used for B.E.P. this is the point

of ‘No profit No loss’ situation. It is the ideal situation for the firm if

the firm exceeds its sales beyond B.E.P. firm enjoys the profit and if

scale below the B.E.P. point, it will suffer losses B.E.P. may be found

using the following formula.

= Fixed Cost Fixed Cost + Profit 100

= 1,00, 00,000 1,00,00,000+ 48,00,000 100

= 67.57 %

18 Risk Factors

1) Changes in government polices may affect the profitability of

the firm, for e.g. Government gives subsidies to the farmer etc.

2) The intensity of competition may increase which may not be

favorable for this business.

3) My industry depends on agricultural product, and agricultural

product depends on rain, rain is mot certain, indirectly demand

of my product is not certain.

4) Price of my product is not fixed of all time, so demand is also

uncertain.

19 Future Plan

In today’s market full with competition, in today business, if there

is no change in product, we will not survive in the market for long

time. So my future plane is innovate new type of food for animal, the

main thing of my dreams food is that food will be cheap in cost and

give more power to animal.

Now at he initial time my industries is not able to produce bulk

production so in future I will be introduce new machinery and starting

bulk production.

20 Conclusions

In today’s era the animal’s milk is important and the demand of

milk is also high, for getting milk from animal we should give some

healthy food to animal so the scope of animal food is high, so demand

of my product is also high.

It includes future expansion and development of the project,

according to proposal project as considered project as considered to

have better prospects.