Entrepreneurship & Small Business MGT 402 BUSINESS PLAN Project yourself as an e

ID: 366890 • Letter: E

Question

Entrepreneurship & Small Business

MGT 402

BUSINESS PLAN

Project yourself as an entrepreneur of a small scale business in Saudi Arabia.

Assignment Objectives & Requirements:

1. Owners

a. Your Business Name, Address, EMail

2. General Business Description (300 – 400 words)

A. What business will you be in? What will you do?

•Mission Statement

•Company goals and objectives

B. Business Philosophy

a. What is important to you in your business?

• To whom will you market your product?

• Describe your

• Describe your most important company strengths and core competencies: What factors will make the company succeed? What do you think your major competitive strengths will be? What background experience, skills, and strengths do you personally bring to this new venture?

• Legal form of ownership: Sole proprietor, Partnership, Corporation, Limited liability corporation (LLC)? Why have you selected this form?

3. Products and Services

a. Describe in depth your products or services. (Technical specifications)

b. What factors will give you competitive advantages or disadvantages? Examples include level of quality or unique or proprietary features.

4. Marketing Plan

a. Market Research- Why?

b. Market Research- How? Primary or Secondary Data?

c. In your marketing plan, be as specific as possible; give statistics, numbers, and sources. The marketing plan will be the basis, later on, of the allimportant sales projection.

Facts about your industry

• What is the total size of your market?

• Current demand in target market.

• Trends in target market—growth trends, trends in consumer preferences, and trends in product development.

• Growth potential and opportunity for a business of your size.

• What barriers to entry do you face in entering this market with your new company?

• How will you overcome the barriers?

• How could the change in technology, change in government regulations, change in the economy, change in your industry

• Describe the most important features. What is special about it?

• Describe the benefits. That is, what will the product do for the customer?

• Identify your targeted customers, their demographics

• What products and companies will compete with you?

• How will your products or services compare with the competition?

Strategy

• Outline a marketing Strategy.

• How will you promote your Product?

• What will be your promotional budget?

Method of setting prices

•Compare your prices with those of the competitors. Are they higher, lower, the same? Why?

•How important is price as a competitive factor?

• Do your intended customers really make their purchase decisions mostly on price?

• What will be your customer service and credit policies?

Distribution Channels

How do you sell your products or services?

Legal Environment

• Licensing and bonding requirements

• Health, workplace, or environmental regulations

• Special regulations covering your industry or profession

• Insurance coverage

• Trademarks, copyrights, or patents (pending, existing, or purchased

•Number of employees

• Type of labor (skilled, unskilled, and professional)

• Where and how will you find the right employees?

• Quality of existing staff

• Pay structure

• Training methods and requirements

• Who does which tasks?

• For certain functions, will you use contract workers in addition to employees?

Inventory

• What kind of inventory will you keep: raw materials, supplies, finished goods?

• Average value in stock (i.e., what is your inventory investment)?

• Rate of turnover and how this compares to the industry averages?

• Seasonal buildups?

• Leadtime for ordering?

Identify key suppliers

• Credit and delivery policies

5. Financial Plan

The financial plan consists of a 12month profit and loss projection, a cashflow projection, a projected balance sheet, and a breakeven calculation. Together they constitute a reasonable estimate of your companys financial future.

6. Conclusion

Assignment Workload

This assignment is an individual assignment.

The word count for this assignment must be between 3000 to 3500 words.

Assignment Submission

There will be three submissions for this assignment as the following:

Submission Week

Due Date

Point covered

Marks

First Submission

Week 7

1,2,&3

Second Submission

Week 11

Third Submission

Week 13

All

Instructor’s assessment based on the sincere effort on Project, and Participation in the followings:

Class

Blackboard

Discussion Board

Wiki

Blogs

TOTAL MARKS

Submission Week

Due Date

Point covered

Marks

First Submission

Week 7

1,2,&3

Second Submission

Week 11

Third Submission

Week 13

All

Instructor’s assessment based on the sincere effort on Project, and Participation in the followings:

Class

Blackboard

Discussion Board

Wiki

Blogs

TOTAL MARKS

Explanation / Answer

Executive Summary
As Saudi Arab is coming up as an education hub for the students of near by district because of which one can see large number of students coming up and staying in hostel near coaching hence we have made a B-plan to make business out of the shift in the food privileges of a student But as we are focusing more to the coaching enrolled student who wants to regenerate their energy level in the break they have so we have also included the beverages in our menu In beverages we have mock tails and Tea to be served that to at economical rate

In this B-plan of coming up with a standalone shop providing noodles and other beverages at posch area which will tap the market of education specially an area which has many upcoming coaching classes and other residential facilities for student so we have made a Bplan to tap the changing food habit of youth noodles as per there need that too at very affordable price same hold true for mocktail, tea and coffee.
Company Overview

A memorable and unique instant of student life is his/her noodles time which many a time is for success celebration or for reaming awake at night or sometimes substitute for food at midnight here we have tried to tap this habit of youngsters and students by offering them customized noodles and other service such as dedicating a song to beloved ones who are with them also to have there special moment more special by having the special event noodles as birthday or anniversary noodles will try to have the same type of products in soft drink

Purpose

People

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Marketing & Sales Strategy

At FUN At Break we would be offering noodles in customized manner, in different style and making your life special event more special by our product and service

Customized noodles would be in several way P

Current Market Scenario

List of Hostel with it’s capacity

Name Of Hostel

Amount of Accommodation(Strength of Hostel)

Hoste 1

3000 (70)

Hostel 2

3500 (80)

Hostel 3

5500 (100)

Hostel 4

6000 (70)

Girls Hostel 1

6500 (80)

Girls Hostel 2

7000 (60)

Girls Hostel 3

7000 (100)

Girls Hostel 4

5000 (70)

Girls Hostel 5

6500 (70)

Boys hostel 1

5000 (80)

Boys hostel 2

3500 (100)

Room rent

Apx 2000 student

List of Coaching Classes in That Area

Coachings

Class 1

Class 2

Class 3

Class 4

Class 5

Class 6

Class 7

Class 8

SWOT ANALYSIS OF FUN At Break

STP OF FUN at Break

Environmental issues

The store will be in the educational hub center which has many coaching centers coming up as mostly students are living in that area which makes our reach to more and more to our target customer and this is the positive perception for our new business to start in that area. Mostly students like taste and smeel of magi we have tapped there need by having noodles from a local suppliers of noodles and taste makers which will provide us a competitive edge in comaprision to our competitor . We will also take the benefit of birthday parties and marriage anniversary to take order from them. This will provide a better environment for our business to survive in this area.

Some other factors which will also affect our center like poha and jalebi centers, chicken chilly centers, pani puri centers and paratha centers are there through which most of the customer will not come in our center.

Situational analysis

Noodles is a flourishing in Indore and there are no such center in My restaurant. My restaurant is the student residential area and most of the students like taste of Noodles to eat when they get when they are free or is having a break at coaching center and colleges. Local market like poha and jalebi center, chicken chilly center and others centers like mugs 21 etc. but there are no such type of restaurants are there in My restaurant.

Finance Analysis

Sales of year is basically divided in to four session business will start from May 2012. Sessions are May-July,Aug-Oct,Nov-Jan,Feb-April which will contribute 20%,15%,35%,30%(Shown In appendix) .Annual growth of sales would be 30 % according to market research and Industry growth .Increase in Overheads would be 10% P.A assumption is taken on basis of Inflation rate which is 10% annual approx..According to our Financial Analysis we would be requiring an initial capital of Rs.204313.026.Where Company is going to invest Rs.143019.1182 in fixed assets and Rs.53825.026 as initial working capital later company will recover it for next month. During Q1 profit would be 15 %(of WC) where annual return would be 29.73799 % For FY 12,40.58985885% for FY13,51.118633 % for FY 14. Promoters would be investing Rs.61293.9078 and loan at the interest rate of 14% of Rs.143019.1182, according to our projected break even analysis we would be able to attend in 10-10.5 months where Average daily target is of Rs.2098.Further things are portrayed as follows.

Monthly Overhead

Overhead costs is a term that covers all of the operating costs of a business that are not directly part of the labour or materials necessary to make an item—all of those additional cost which you may not even think about in estimating the wholesale price of an item. Overhead costs are generally fixed, monthly expenses. You will have these costs whether or not you make or sell anything. Your rent, insurance premiums, telephone bills and utilities still have to be paid whether you are away at craft shows or working all night to finish an order.

As per the Geeta Bahvan Location total rent and other Overhead is .

Overhead

Breakup

Monthly

Yearly

Licence Fees

Govt Fees

Food Corporation

A.C(10 ton) Installation

900

1000

1200

3100

Store Rent

(Rs.70/ per Sq.ft * Area 150 Sq.ft )

10500

126000

Insurance (fire & safety)

(Rs. 10/Sq.ft * Area 150 Sq.ft )

1500

Electricity bill

(Rs.6/per unit* 15 Unit per day)*30

2700

32400*

Gasoline

(Rs. 1300 per cylinder * 2 cylinder pre month)

2600

31200*

Chef

10000

12000

Sweeper

1500

18000

Helper

3000

36000

Telephone And Internet

600

7200

T.V Connection

Rs 200/per month

200

2400

Preliminary Expenses

Preliminary expenses are the nature of fictitious assets. These are the formation expenses of the company before any operation of the business held. These are transferred to the profit and loss accounts and written off every year from the profits of the business. These expenses are shown on the assets of the balance sheet under the head miscellaneous.

Preliminary Expenses

Breakup

Total Exp.

Furniture

20000

Light Fitting

electronic meter @ Rs. 6000

4 Fan@ Rs. 4000

CFL & other @ Rs. 5000

Exhaust fan@ Rs. 3000

Other @ Rs. 7000

25000

Refrigerator

Pepsi refrigerator

2500

Music System

5000

TV LCD

(Sony)

20000

Gas Connection

(Rs.1300 Per cylinder

Rs. 1500 security Deposit) *2

5480

Kitchen Chula

2500

Kitchen crockery

5000

Computer & Printer

25000

Other exp.

Appendix 1 - BEP Analysis

Break Even Point

Unit

Rs.

Sales Price

36.6667

No. of units/day

2383.3355

Unit/year

23400

858000.78

Unit/month

1950

71500.065

VC (40%)

14.66668

343200.312

Contribution

22.00002

514800.468

Fixed Cost

150488

Fixed OH/year

302700

Total Fixed Exp

453188

BEP

20599.43582

755313.3333

Monthly BEP

1716.619652

62942.77778

Daily BEP

57.22065505

2098.092593

Expected sales(based on market)/day

2383.3355

Expected sales(based on market)/month

1950

71500.065

Expected Sales(based on market)/year

23400

858000.78

Appendix 2 - Working capital/Month

Working Capital

Fixed OH/Month

25225

Variable cost/month

28600.026

Total Wc/month

53825.026

Appendix 3 – Income Statement Breakup of FY 12

FY12(QuartileDevision)

Particulars

May-July

Aug-Oct

Nov-jan

Feb-apr

Total

Sales in %(0f yearly sales)

Sales

171600.156

128700.117

300300.273

257400.234

VC (40%)

68640.0624

51480.0468

120120.1092

102960.0936

75675

Total Exp

144315.0624

127155.0468

195795.1092

178635.0936

PBIT

27285.0936

1545.0702

104505.1638

78765.1404

Interest

5005.669137

PAT

22279.42446

-3460.598937

99499.49466

73759.47126

192077.7915

Return(%)

15.43804513

-2.721558463

50.81817164

41.29058282

Appendix 4 – Income Statement Projection For next two Years

Income Statement

Particulars

FY 12

FY 13

FY 14

Sales

858000.78

1115401.014

1450021.318

VC (40%)

343200.312

446160.4056

580008.5273

302700

332970

366267

Total EXP

645900.312

779130.4056

946275.5273

PBIT

212100.468

336270.6084

503745.7909

Interest

20022.67655

PAT

192077.7915

316247.9319

483723.1144

Return in %

29.73799

40.58985885

51.11863304

Appendix 5 - Balance Sheet

Balance Sheet

Capital

Particulars

FY 12

Owner's Fund

61293.9078

Loan Fund

143019.1182

Total Capital

204313.026

Add Profit

192077.7915

Total

396390.8175

Assets

Particulars

Fixed Cost

150488

Inventories

28600.026

OH Advance

25225

Total Assets

53825.026

Cash At Bank

192077.7915

Total

396390.8175

Notes :

1. Expected annual growth in sales is 30%

2. Expected Annual growth in Cost will be 10 %

Appendix 6 - Initial Total Investment

Initial Investment

Initial WC

53825.026

Fixed Cost

150488

Total Investment

204313.026

Sources of fund

Loan 70%

143019.1182

Owners Capital

61293.9078

Interest @14% P.A

20022.67655

Operation Expense

To serve a customer :-When customer will come they have to order what they want at the cashier and would receive a computer printed receipt which would be coupon with a coupon number and there would a TV screen shown which order is ready at the reception and then customer has to pick it up

Organization Structure

Operational parameters

Raw Material

How Much

Per bowl

Where

Forks

100-120 pieces

1-2

Warehouse Road -1

Bowl

100 pieces

Chop Stick

50-70 pieces

Noodles

Soya Sauce

1-2 bottles of 1Kg

1.5 tsp*

Warehouse Road-2

Chili Sauce

2 bottle of 1kg

1 tsp*

Ketchup Sauce

1-2 box

100-200gram

Worcestershire Sauce

2 bottles of 1kg

2 tbsp**

Tabasco Sauce

1 bottle of 1 kg

2 dash***

Vegetable

Green Bell Peppers

1-2 kg

100-150 gram

Garlic

4 cloves

Onion

2 finely chopped

Parsley

At most 1kg

2 tbsp****

*1 teaspoon (tsp) =4.92 ml

**1 tablespoon(tbsp)=14.78 ml

***1 dash=less than (1/8) teaspoon

***1kg of sauce bottle =0.98 litre

****1kg of parsley=5.8823 litre

End Notes

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