Business Plan.......... “Green Chilly & Spices”

Assignment

On

Business Plan

“Green Chilly & Spices”

Course Information:

Course Title: Entrepreneurship Development

Course Code: MGT-602

Submitted To

Marzan Rahman

Lecturer

Department of Marketing

Hamdard University Bangladseh

 

Submitted By

         Md. Habibul Islam Hamdu

                                                                                            Id:

        Department of Marketing

                                                                                            Hamdard University Bangladesh

Date of Submission – 9 December 2014

Hamdard University Bangladesh (HUB)

Letter of Transmittal

9^th September 2014

Marzan Rahman

Lecturer in Marketing

Hamdard University Bangladesh (HUB)

New town, Sonargaon, Narayangonj

Sub: Submission the term paper on “BUSINESS PLAN”.

Dear Mam,

This is a great pleasure for me to submit this successful Report upon Business Plan. During my working period, I went through various places. I have tried my level best to prepare this “Business Plan” on the perspective of “Green Chilly & Spices”. I have gathered a lot of practical knowledge to prepare this report. Through this purpose I have been able to know the actual market scenario. I think this is a great achievement for me as a student of BBA. I would feel really great if this report is of any use.

Finally, I would like to thank you for valuable guidance & supportive in preparing this report. I would be grateful for any clarification when required and highly obliged if you approve this report and provide your valuable judgment on it.

Yours Truly,

---------------------

Md. Habibul Islam Hamdu

Hamdard University Bangladesh

Acknowledgement

I am very glad that in spite of having many limitations I have completed the business plan successfully. Preparing this report, I received cordial and sincere assistance from many concerns.

First of all I would like to express my gratitude and deepest thanks to almighty Allah for whom I became able to prepare this report successfully.

I also would like to express my sincere gratitude and deepest thanks to my honorable course instructor Marzan RAhman who encouraged me to prepare and submit this report due manner and who provides me guidelines and materials to prepare the report. I also thank him for assigning me such a practical report.

I also wish to express my gratitude to The Hamdard University Bangladesh (HUB) that gave me the opportunity to prepare this research report.

 

 

 

 

 

 

 

 

 

 

 

 

 

Table of Contents

 

Contents	Page Numbers
Introduction	05
Executive Summary	06-07
Industry analysis                      Future overlooks & trends                      Analysis of competitors                      Market segmentation                      Industry Forecast	08
Description of venture                      Product                      Company Ownership                      Size of business                      Company location and facility	09-10
Production plan        Manufacturing Process        Physical Plant        Machine & equipment             Names of suppliers of raw materials:	11
Marketing Plan                     Market Segmentation                    Target Market Segment Strategy                    Product                    Pricing Strategy                    Promotion Strategy                    Distribution Patterns                    Sales Forecast	12-14
Organizational Plan                    Form of ownership                    Management Background team                    Roles and responsibility of members of organization                    Organizational Structure	15
Financial Plan                   Important Assumptions                   Break-even Analysis                   Projected Income Statement                   Projected Balance Sheet                Cost of production statement                  Assessment of risk                Evaluate weakness of business	16-20
Conclusion	21

Introduction

To prepare this Business Plan I have worked in the practical field like conducting a market survey, collecting accurate information of the market, gathering practical knowledge of the market etc. I have applied the knowledge of Marketing; Finance & Human Resource Management & Other sources. I have learned a lot of things to prepare this Business Plan. I hope it will help us to conduct a Business in future.

v  Name and Address of this business

            Name: “Green Chilly & Spices”

            Plot No: 10/A, Mirpur-2, Dhaka-1216

 

v  Names and Address of principals

            Md. Habibul Islam Hamdu

            Hobigonj, Sylhet

v  Nature of business

          This is sole proprietorship business. This is mainly a fast food and also it produces            

          some other beverage product like, fruit juice, drinks, chocolate, etc.

v  Statement of financing needed

            First we need about Tk.30, 50,000 to start the business.

 

 

Executive Summary

I have made a “Business Plan” on the perspective of “Green Chilly & Spices”.  The main goal of my shop is to earn profit through providing quality service at a reasonable price. I have tried to adopt new technologies to fulfill the customers demand. “Green Chilly & Spices” is different than others in our country introducing various sorts of facilities. “Green Chilly & Spices” provide cafe zone, kid zone, smoking zone, conference room, home delivery service, accepting order through internet and state of the art facilities. Above all I will provide Drive-thru and Mobile Cafes facilities.

“Green Chilly & Spices” offers its customers the supreme all the fast food related items and hot and cold beverages, specializing in specialty Barger, Pizza, Sandwich, coffees, blended teas, and other custom drinks. In addition, it will offer soft drinks, fresh-baked pastries; “Green Chilly & Spices” offers chocolates, frozen coffees, and more.

 

“Green Chilly & Spices” will focus on two markets:

The daily Customer/Commuter: Someone traveling to / from work, out shopping, delivering goods and services, or just out for a drive.

The Captive Consumer- someone who is in a restricted environment that does not allow convenient departure and return while searching for refreshments, or where refreshments stands are an integral part of the environment.

“Green Chilly & Spices” will penetrate the commuter and captive consumer markets by arranging Drive-thru facilities and Mobile Cafes in the most logical and accessible locations. The Drive-thru facilities are designed to handle two-sided traffic and distribute customer-designed, specially ordered Barger, Pizza and Sandwich in less time than required for a visit to the locally owned cafe or one of the national chains.

“Green Chilly & Spices” financial picture is quite promising. Since “Green Chilly & Spices” is operating a cash business, the initial cost is significantly less than many start-ups these days. The process is labor intensive and “Green Chilly & Spices” recognizes that a higher level of talent is required. The financial investment in its employees will be one of the greatest differentiators between it and “Green Chilly & Spices” competition. For the purpose of this pro-forma plan, the capital expenditures of facilities and equipment are financed. There will be minimum inventory on hand so as to keep the product fresh and to take advantage of price drops, when and if they should occur.

“Green Chilly & Spices” anticipates the initial combination of investments and long term financing of Tk. 30, 50,000 to carry the business

.

Objectives

“Green Chilly & Spices” has established three firm objectives it wishes to achieve in the next three years:

v  Five Drive-thru locations and four fully booked Mobile Cafes by the end of the third year.

v  Gross Margin of 50% or more.

v  Net After-tax Profit above 10% of Sales.

Mission

“Green Chilly & Spices” Mission is three-fold, with each being as integral to our success as the next.

Product Mission: Provide customers the finest quality fast food and beverage in the most efficient time at an affordable cost.

Community Mission - Provide community support through customer involvement by building more customer loyalty and providing customer life time value.
Economic Mission - Operate and grow at a profitable rate through sound economic decisions.

Keys to Success

There are three keys to success in this business, three of which are virtually the same as any foodservice business. It is our fourth key--the Community Mission--that will give us that extra measure of respect in the public eye.

v  The greatest locations - visibility, high traffic pattern, convenient access.

v  The best products - freshest Fast Food, hot and cold beverages, cleanest equipment, premium serving containers and consistent flavor.

v  The friendliest attendants - cheerful, skilled, professional, communicative.

 

 

 

 

 

 

 

 

 

Industry analysis

In this section I analysis the overall fast food industry analysis through various ways.

 

Future overlooks and trends

The demand for fast food is increasing day by day. By analyzing past 5years I realize that the demand for fast food is increased by 10-15 per cent over a year. Here I mainly focus the students & Medium, upper class customer.

 

 Analysis of competitors

Here the main competitors of my business are food com. It is pleasure for me that they use traditional business plan to produce the product and deliver the product. There business size is small than that of me. They do not use any state of the art technology. But they have also some strength side also that are, they are doing business for a long time so they have large number of regular customer, so it will be more time to take the market favorable to me.

 

Market segmentation

The fast food is popular mainly to the young boys and girl from medium and upper class. Here my main focus is on to the students. we think establish a fast food shop is most reasonable for this area.

 

Industry forecast

The demand for fast food is increasing day by day. By analyzing previous 5 years we found the following information

 

Year	Consumption (Tk.)	Increased Percentage of consumption than past year
2009	30 million	10 %
2010	34.5 million	15%
2011	38.14 million	12%
2012	43.1 million	14%
2013	49.5 million	15%

 

So from the following information I can say that the fast food industry is growing industry. So the investment in such type of business will be more profitable.

 

 

 

Description of venture

 

“Green Chilly & Spices” uses a system that is new to the fast food and beverage service industry to provide all kind of fast food and hot and cold beverages in a convenient and time-efficient way. “Green Chilly & Spices” provides its customers the ability to drive up custom blended espresso drink, freshly brewed coffee, or other beverage. “Green Chilly & Spices” is offering a high quality option to the fast-food, and institutional coffee.

Products

“Green Chilly & Spices” provides its customers the finest all kind of fast food and hot and cold beverages, specializing in specialty Burger, Pizza, coffees and custom blended teas. In addition, “Green Chilly & Spices” will offer select domestic soft drinks, Italian sodas, fresh-baked pastries, and other confections. Seasonally, “Green Chilly & Spices” will add beverages such as chocolates, frozen coffees, and so forth.

 Company Ownership

“Green Chilly & Spices” is a Limited Liability Corporation. All liability and benefit will be owned by Md. Habibul Islam Hamdu and it’s a form of sole proprietorship business.

Size of business

The size of business con be measure by its start up summary, this are..

Start-up Summary

The start-up expenses total just Tk. 11, 80,000, for two years land lease purpose it will cost Tk. 8, 40,000. In addition there are some expenses which are shown in the following table. In the same way, for office equipment the amount will be Tk-7, 00,000 and its total start up assets amounted in Tk. 18, 70,000. Starts up requirements are stated in the table:

Start-up (Requirements)	Amount (Tk.)
Start-up Expenses
Legal	15,000
Land Lease (2 Years)	8,40,000
Administration cost	2,00,000
Website Development	1,00,000
Identity/Logos/Stationary	10,000
Other	15,000
Total Start-up Expenses	11,80,000
Start-up Assets
Cash Required	8,00,000
Start-up Inventory	1,30,000
Other Current Assets	0
Long-term Assets	2,40,000
Office Equipment	7,00,000
Total  Start up Assets	18,70,000
Total requirement	30,50,000

Company Locations and Facilities

“Green Chilly & Spices” will open its first branch in Mirpur-2. 10 more branches will be placed throughout the metropolitan area over the next 5 years.

The demographic and physical requirements for a location are:

v  Visible from roadway.

v  Easy entry

v  Established retail shops in area.

 

              

 

 

 

 

Production plan

I have some production plan by which I can produce product at a quality & reasonable price.

 

Manufacturing Process

“Green Chilly & Spices” is quality food in all of. Here I produce some beverage & Bread item like Burger, Pizza, and Sandwich. For bread item Best Fast Food have a large oven some tray& other necessary machine.

Physical Plant

All of my productions are done by the machine. Worker only give raw material into the machine.

Machine & equipment

“Green Chilly & Spices” tries to use the latest technology to produced product & survive them.

Technology:

The Daily delivery system is based on its technology. “Green Chilly & Spices” is using state-of-the-art, two-sided facilities to provide convenience and efficiency for its customers. “Green Chilly & Spices” has also designed state-of-the-art Mobile Cafes that will be deployed from time to time on high school and college campuses, corporate campuses, and at special events. Here also have some machinery which is use like

v  Computer

v  Oven

v  Juice machine

v  Fan, light

v  C .C Camera

Names of suppliers of raw materials:

For the purpose of production food & survive food item “Green Chilly & Spices” collect raw material from some person such as…

v  Local Bread Factory

v  Soft Drink company

v  Firm for egg.

v  Fruit shop

 

 

 

 

 

Marketing Plan

“Green Chilly & Spices” will focus on two markets:

v  The Daily Commuter- someone traveling to or from work, out shopping, delivering goods or services, or just out for a drive.

v  The Captive Consumer- someone who is in a restricted environment that does not allow convenient departure and return while searching for refreshments, or where refreshments stands are an integral part of the environment. Under captive customer we mainly focus the students.

Market Segmentation

“Green Chilly & Spices” will focus on two different market segments: Commuters and Captive Consumers. To access both of these markets, “Green Chilly & Spices” has two different delivery systems. For the commuters, “Green Chilly & Spices” has the Drive-thru fast food house. For the captive consumer, “Green Chilly & Spices” has the Mobile Cafe.

Target Market Segment Strategy

“Green Chilly & Spices” target market is the mobile individual who has more money than time, and excellent taste in a choice of fast food and beverage, but no time to remain in a cafe. By locating the Drive-Thru in high traffic/high visibility areas, this unique--and abundant--consumer will seek “Green Chilly & Spices” out and become a regular guest.

To penetrate the target market for the Mobile Cafes, these units will do what they were designed to do. “Green Chilly & Spices” will take the cafe to the customer! By using the community support program “Green Chilly & Spices” is instituting, arrangements will be made to visit a high school, college campus, or a corporate campus once or twice a month (Even visit these facilities for special games, tournaments, recruiting events, or corporate open houses). And, for every cup or baked goods sold, a portion is returned to the high school or college. It becomes a tremendous, painless way for the institution to gain a financial reward while providing a pleasant and fulfilling benefit to their students or employees.

Product Description

“Green Chilly & Spices” provides its customers, facility or one of the Mobile Cafes, the ability to custom order all kind of fast food and coffee beverage that will be blended to their exact specifications. “Green Chilly & Spices” serving the highest quality Burger, Pizza and hot and cold beverages, with exceptional attention to detail.

Besides fast food, “Green Chilly & Spices” will offer teas, domestic and Italian sodas, frozen coffee beverages, seasonal specialty drinks, pastries, and other baked goods. Through the website and certain locations, “Green Chilly & Spices” will market premium items such as coffee mugs, T-shirts and ball caps, and more.

 

            

Pricing Strategy

“Green Chilly & Spices” pricing will be comparable to the competition, but with the value-added feature of immediate service and convenience.

Our strategy is to price our products at a level comparable to our competitors. Our strategy takes into account production costs, competitive pricing strategies and consumer price sensitivity. The household furniture market is very competitive and the price conscious consumer market is looking for good value. Our company's goal is to provide good quality product for a reasonable price. Such as…

Items	Price 2013 (Taka)	Price 2014(Taka)
Burger (per pies )	70	90
Pizza          ”	250	270
Sandwich   ”	40	50
Singara       ”	10	15
Coffee	50	55
Fresh juice	50	60
Soft drinks	According to retail price	According to retail price

Promotion Strategy

The long-range goal is to gain enough visibility to leverage the product line into other regions and generate inquiries from potential inventors.

Our company's promotional strategy targets potential consumers. A brochure has been developed on each product line that is distributed to interested consumers. The brochures feature pictures of each product and highlight the unique item and quality of our products.

Advertising and Promotion:

In the first year, “Green Chilly & Spices” plans to spend Tk. 50,000 on advertising and promotion; this would not be considered a serious advertising budget for any business.tor that we use some media like

v  Banner

v  Visiting card.

v  Leafleted.

v  Face book etc.

Distribution Patterns

The cafe experience comes from the Italian origins of espresso. The customer comes in to a beautifully decorated facility, surrounded by wondrous aromas and finds himself involved in a sensory experience that, more often than not, masks an average product at a premium price.

Sales Forecast

In the first year, “Green Chilly & Spices” anticipates having two Drive-thru locations in operation. The first location will open in the third month of this plan and be fully operational beginning on the 1st day of July. The second Drive-thru will open six months later. In the second year, “Green Chilly & Spices” will add two more Drive-thru and, in the third year, “Green Chilly & Spices” will add an additional nine Drive-thru facilities.

The sales forecast for the first year

1st Quarter (Sales Tk)	2nd Quarter (Sales Tk.)	3rd Quarter (Sales Tk.)	4th Quarter (Sales Tk.)	Total (Sales Tk.)
10,00,000	20,00,000	25,00,000	35,00,000	90,00,000

Organizational Plan

“Green Chilly & Spices” is a relatively flat organization. Overhead for management will be kept to a minimum and all senior managers will be "hands-on" workers. There is no intention of having a top-heavy organization that drains profits and complicates decisions.

Ownership

“Green Chilly & Spices” is incorporated under the laws of Indian act 1983 and is owned and operated by Md. Habibul Islam Hamdu. He is the only owner of this business & involved in its operations and management.

Management team background

The owners Md. Habibul Islam Hamdu have extensive experience in the fast food industry. For the past 7 years, Afrid Md. Isfar has worked in making fast food related items in the USA.

Kajol Kumar worked as manager in fast food Company in Soudi Arabia for 10 years. Saiful Islam Ahmed worked as a marketing sector of a fast food company in India for 8 years.

Roles and Responsibilities of members of organization

Md. Habibul Islam Hamdu will act as a manager of the company, Afrid Md. Isfar will act as production manager and Kajol Kumar will act as marketing manager of this business.

Organizational Structure

The organization will be a relatively flat one, since the majority of personnel are involved in production and there will be a relatively low headcount in management.

There are three functioning groups within the company: Production, Sales and Marketing, and General and Administrative.

Financial Plan

The Daily financial picture is quite promising. Since “Green Chilly & Spices” is operating a cash business, the initial cost is significantly less than many start-ups these days. The process is labor intensive and “Green Chilly & Spices” recognizes that a higher level of talent is required. The financial investment in its employees will be one of the greatest differentiators between it and “Green Chilly & Spices” competition. For the purpose of this pro-forma plan, the facilities and equipment are financed. These items are capital expenditures and will be available for financing. There will be a minimum of inventory on hand so as to keep the product fresh and to take advantage of price drops, when and if they should occur. “Green Chilly & Spices” anticipates the initial combination of investments and long-term financing of 21,00,000 to carry it without the need for any additional equity or debt investment, beyond the purchase of equipment or facilities

Important Assumptions

The financial plan depends on important assumptions, most of which are shown in the following table. The key underlying assumptions are:

v  “Green Chilly & Spices” assumes a slow-growth economy, without major recession.

v  “Green Chilly & Spices” assumes of course that there are no unforeseen changes in public health perceptions of its general products.

Cost of production statement

Cost Statement is most important of any business, because it’s depends on the company profits margin. So Mister “Green Chilly & Spices” cost statement show in the below-

Cost of production statement

For the two years (2013-2014)

Particular	2013 (taka)	2014(taka)
Direct materials:
Purchase of goods	500,0000	700,000
Delivered cost of purchase	100, 000	150000
Tax & duty	100,000	130,000
Cost of goods sold	700,000	980,000
Add: administrative expense:
Staff  salaries	600,000	800000
Legal expanse	100,000	170000
Office expenses	150,000	250000
Total of office & administrative	800,000	1220,000
Marketing & selling overhead:
Marketing selling	200,000	220000
Advertising	500,000	800000
sales promotion	20,000	50000
Total selling & marketing	720,000	1070,000
Total cost	2 ,220,000	3,270,000
40 % profit	888000	1308000
Total sales	3108000	4578000

Break-even Analysis

“Green Chilly & Spices” calculated the fixed costs to be Tk. 34, 45,000; average variable cost per unit is Tk. 50. “Green Chilly & Spices” concludes that we will need at least about 68900 units per year with average pricing Tk. 100 per unit to reach break-even at Tk.68,90,000 per year.

Break-even Analysis
Yearly Units Break-even	68,900
Yearly Revenue Break-even	68, 90,000
Assumptions
Average Per-Unit Revenue	100
Average Per-Unit Variable Cost	50
Estimated Monthly Fixed Cost	34,45,000

Projected Income Statement

Cash flow will have to be carefully monitored, as in any business, but “Green Chilly & Spices” is also the beneficiary of operating a cash business. After the initial investment and start-up costs are covered, the business will become relatively self-sustaining. With the exception of seasonal dips, which “Green Chilly & Spices” has attempted to account for, through changes in the menu items. Assuming an initial investment and financing of Tk.30,50,000, which would include Tk. 10,00,000 of operating capital, “Green Chilly & Spices” anticipates the cost of goods sold would be Tk. 50 per unit, and sales will be about 90,000 units per year.

Pro Forma Income statement	2010
Sales	90,00,000
Cost of Goods Sold	45,00,000
Gross Margin	45,00,000
Operating Expenses
Advertising/Promotion	70,000
Website	1,00,000
General and Administrative Payroll	24,00,000
Depreciation	40,000
Utilities	60,000
Insurance	1,00,000
Rent	6,00,000
Interest	75,000
Total Operating Expenses	34,45,000
Net Profit	10,55,000

Projected Balance Sheet

With the present financial projections, “Green Chilly & Spices” expects to build a company with strong profit potential, and a solid balance sheet that will be asset heavy and flush with cash at the end of the first year. “Green Chilly & Spices” has strong desire using the excess cash for continued growth.

	“Green Chilly & Spices”		Balance Sheet
		Date:	9/12/2014
Assets		2014	2013
Current Assets
	Cash	25,500
	Accounts receivable
	Inventory	589,500
	Prepaid expenses
	Short-term investments
	Total current assets	615,000	-
Fixed (Long-Term) Assets
	Long-term investments	240,000
	Property, plant, and equipment	700,000
	(Less accumulated depreciation)	(40,000)
	Intangible assets
	Total fixed assets	900,000	-
Other Assets
	Deferred income tax
	Other
	Total Other Assets	-	-
Total Assets		1,515,000	-
Liabilities and Owner's Equity
Current Liabilities
	Accounts payable	50,000
	Current Borrowing	335,000
	Interest	75,000
	Profit	1,055,000
	Unearned revenue
	Current portion of long-term debt
	Total current liabilities	1,515,000	-
Long-Term Liabilities
	Long-term debt
	Deferred income tax
	Other
	Total long-term liabilities	-	-
Owner's Equity
	Owner's investment
	Retained earnings
	Other
	Total owner's equity	-	-
Total Liabilities and Owner's Equity		1,515,000	-
			{42}
Common Financial Ratios
Debt Ratio (Total Liabilities / Total Assets)		1.00
Current Ratio (Current Assets / Current Liabilities)		0.41
Working Capital (Current Assets - Current Liabilities)		(900,000)	-
Assets-to-Equity Ratio (Total Assets / Owner's Equity)
Debt-to-Equity Ratio (Total Liabilities / Owner's Equity)

Sources and applications of funds

Source and application of fund

Years 2011(TK.)

Particular		Amount
Source of fund:
Mortgage loan		6,00,000
Term loan		4,00,000
Personal funds		50,000
Total funds provided		10,50,000
Applications of funds:
Purchase of equipment		12,0000
Loan repayment		15,000

Assessment of risk

There are many risk face any new business. So I have to face a risk of my business. Such as-

v  Technology change

v  To competitors of substitutes

v  To competitors of food Com

v  Price reduce

v  Face difficult environment

v  And to face uncrating problems etc.

Evaluate weakness of business:

When starting a new business here have some weakness. So my business plan is “Green Chilly & Spices” has some weakness, such as-

v  Lack of resources.

v  Lack of operation.

v  Reduce employees. 

v  Not sufficient technology etc.

v  Prick hack

v  Transportation

Conclusion

As the student of business school it is compulsory to work in the practical field. To work in the practical field I have to acquire the proper knowledge about actual market scenario. Through this “Business Plan” I have learned a lot of things that are very much essential to build up my carrier. If I can implement this “Business plan” in current market then I hope I can be able to gain my desirable target. This “Business Plan” will help me to start a small business successfully. Last of all I would like to say that this “Business Plan” is very much essential & effective for me.