1. A
BUSINESS PLAN ON
PREPARED BY : GOHEL AJAY J.
CLASS : M.B.A. -III
ROLL NO. : 24
ACADEMIC YEAR : 2009-2011
COLLEGE : N.R.VEKARIA INSTITUTE OF
BUSINESS MANAGEMENT
STUDIES, JUNAGADH
SUBMITTED TO : DR. PROF. RAJESH PATEL
1

2. DECLARATION
I, the undersigned GOHEL AJAY J.
student of NRVIBMS-JUNAGADH of M.B.A.
declare that the project work presented in
this report is my own work and has been
carried out at my own efforts.
Date :
Place :
Student Signature
GOHEL AJAY J.
2

3. PREFACE
“Knowledge is an ocean that cannot be
fathomed – the deeper you go, the more you
see its unbounded profundity yet, in the
competitive world of today. It is very
essential for young entrepreneurs to have
the basic knowledge about how SSI can be
started and which type of plan is to be
submitted to the bank or other financial
institution for the purpose of loan because
SSI plays a vital role in promoting the
economic condition which aids in raising the
total national income.
3

4. INDEX
Sr. Particulars Page
No. No.
1. Introduction 7
2. Project at glance 8
3. Partners Background 9
4. Justification of location 11
5. Product detail 13
6. Details of Raw materials 14
7. Details of Suppliers 15
8. Manufacturing Process 16
9. Staff and Labor 18
10. Administrative work 19
11. Implementation of schedule 20
12. Utilities and Expenses 21
13. Financial details 22
14. Capital Investment 23
15. Break Even Point 25
16. Fixed Assets 26
17. Cost of Production 29
18. Profitability 30
19. Details of Sales 31
20. Ratio Analysis 32
21. Use of Application 33
22. Capacity of Utilization 34
23. Basis and Presumption 35
24. Marketing Analysis 36
25. Market Strategies 38
26. Competitors 39
27. Risk Factors 40
4

5. 28. Future Prospects 41
29. Bibliography 42
INTRODUCTION
The small scale industry has emerged
as the most dynamic sector of Indian
industrial economy accounting for ever 55%
of the total value of industrial production
over 40% of the country’s exports & more
importantly providing employment
5

6. opportunities to over 175 lac people in 3175
units. All along it has shown the growing
spirit of entrepreneurship.
In other words, small business is the
open university for entrepreneurs to
translate their vision innovative ideas into
reality. It is thus the seed of
entrepreneurial dreams.
This report is intended to set forth
project that has been undertaken by Dhruv
enterprise, so that its nature be
understood, its projected operation
comprehend & its feasibility. This project
contain project bearing the profitability of
the venture & its worthiness. It also
introduces gives personified data of the
manufacturers with brief history of all the
partners firm with location & locational
advantages with prima-facie facts of the
product & project.
Dhruv enterprise propose to set up a
honey mfg. plant with production capacity of
75000 bottles p.a. at district Isanpur in
Ahmedabad.
6

7. PROJECT AT A GLANCE
Name of the unit : Dhruv Enterprise
Address : Dhruv enterprise,
6/7, Rollan Estate,
Isanpur, Ahmedabad,
Registered office : 104, silver Ask,
Nr. Malaviya Petrol Pump
Gondal Road,
Rajkot : 360002
Form of organization : Partnership
Size of the unit : SSI
Partners : 1)Gohel Ajay J.
2)Maradiya Samir
3)Kothari Amit B.
Name of product : Honey
7

8. PARTNER’S BACKGROUND
• Partner 1 :
Name : Gohel Ajay J.
Address : Near Mayani Chawk,
B/d Back Bone S.C.,
“PUNYA BHUMI”,
Rajkot – 360004,
Age : 22 years
Education Qualification : M.B.A persuing
(Mktg.)
Experience : In Krishna Enterprise –
2yrs.
Income : Rs. 20,000
Financial contribution : 40%
Responsibility : Mktg. & personnel
8

9. • Partner 2 :
Name : Maradiya Samir
Address : Mehul Nagar,
Nr Nilkanth Complex,
Rajkot
Age : 28 years
Education Qualification: C.A.
Experience :Options Pvt.Ltd. 4 yrs.
Income : Rs. 30,000
Financial contribution : 30%
Responsibility : Accounting & finance
dept.
9

10. • Partner 3 :
Name : Kothari Amit B.
Address : “Girja Niwas”,
Amin Marg, Tagore Nagar,
Behind star Appartment,
Rajkot
Age : 32 years
Education Qualification : B.Sc, M.Sc
(Chemical Eng.)
Experience : Dabur Foods Pvt. Ltd–
15yrs.
Income : Rs. 40,000
Financial contribution : 30%
Responsibility : Production & Finance
10

11. JUSTIFICATION OF LOCATION
The chief object of any industrial
concern is to maximize the profit through
the minimization of cost of production. This
object can be achieved when the ideal
location is very important because it
affects the profitability of the concern.
Hence keeping all the above aspects,
the ideal & suitable location for honey
processing is selected. The plant is located
under the name, Dhruv enterprise, 6/7 Rollan
Estate, Isanpur, Ahmedabad.
This location is selected, keeping in
mind all the essential factors affecting the
location. i.e. transportation cost, raw
materials, competitors & other technological
factors.
11

12. • Location is also selected by considering
all this, below mentioned factors
1.Honey house is located in Rollan Estate,
Isanpur, Ahmedabad, near a major highway
that will encourage backdoor sales.
2.It is located in the above mentioned
area, as it contains abundant nectar
sources.
3.The location is also selected, by
researching the mkt. & searching the mkt.
i.e. it includes information about
customers & their location also.
12

13. PRODUCT DETAILS
Honey is one of the most ancient of
all ingredients known to humankind & yet it
is perfect for a modern day people. Honey is
defined as an aromatic, visions material
made from the nectars of flowers through the
collection of honey-bees. Bees may travel as
far as 55,000 miles & visit more to make a
proud of honey.
The colour & flavour of honey differ
depending on the bees nectar source. In fact
there are more than 300 unique kinds of
honey. In general, loghter coloured honeys
are mild in flavour, while darder honeys are
usually more robust in flavour.
Honey is primarily composed of
“Fructose”, “Glucose”, & “Water”. It also
contains sugar as well as trace enzymes,
minerals, vitamins & amino acids. It has
curative properties Aristotle, the father of
natural science said, “Honey improves health
& prolongs life”.
Honey’s composition is as follows :
Moisture - 20% Minerals - 0.2%
13

14. Protein - 0.3% Carbohydrates -
79.5%
Thus, honey is one of the finest
sources of heat & energy – mainly due to the
high carbohydrate content.
14

15. DETAILS OF RAW MATERIAL
Raw Materials are the biggest asset
of any mfg. unit. It gives proper form or
figure to the product and thus makes the
finished product.
Raw Materials needed for honey making
are as follows :
1.Crude honey 5.05 MT (0.01% wastage)
2.500 g.m. bottles with cap.
3.Cartons, strap etc. for packaging.
• Raw Materials
Sr. Particular Qty Rate Rs.
No.
1. Crude Honey 5050 65 3,28,250
mt
2. 500 g.m. 10,000 5 50,000
bottle with
cap, label
etc.
3. Cartons, scrap 500 12 6,000
etc.
Total 3,84,250
15

16. DETAILS OF SUPPLIERS
NAME OF SUPPLIERS PRODUCT
Amrut Milks, Metoda Milk
Jigar Agencies, Rajkot Cream
Arifbhai Hussainbhai, Rajkot Meat
Azimbhai Altafbhai, Veraval Bondless cod
fish
S. S. Khantawkar, Vanthali Oranges
Arifbhai Hussainbhai, Rajkot Eggs
16

17. MANUFACTURING PROCESS
1.Bee – keeping :
Three species of honey bees, namely
Apes dorsa, Apes flora and Apes indicia
which are available in India are used for
honey comb. In India, various sizes of
wooden frames which are movable, are in use
for honey comb. These are of standard sizes.
They are placed in lonely places like jungle
where movement of men, animal etc. is
minimum. To each box, a honey spice is
proved which collects more bees. All these
bees fill the cells of honey comb, are
hermetically sealed by capping with wax.
Before such combs are placed in honey
extractor, these capping are removed with
the help of an uncapping knife. The
extractor should be worked slowly in the
beginning at about 150 RPM (revolution per
minute) for about 2 minutes. Then the side
of the frame should be reserved & the
extractor again worked for the same
duration. The extractor should be emptied
into astern when its honey chamber is 2/3rd
17

18. full. It is advisable to make arrangement
for straining & packing honey into this
promptly to obviate a need of subsequent
heating of he produce. Freshly extracted
honey is warm & easy to stain.
18

19. 2.Honey processing :
Crude honey may contain some
impurities such as wax, pollen, parts of the
bees, dirt etc. Hence it is to be processed
to make it more presentable. Crude honey is
transferred to a jacketed tin or kettle
where water will circulate between jacketed
portion. The tin is placed on a fire/store
to heat the water. Honey is stirred
continuously & temperature not allowed to
raise about 41oC over heating damages the
aroma flavour & colour of honey. Besides bee
wax in the honey melts at 60oC to 62.8oC and
block the strainer. The hot honey should be
passed through the strainer. It is allowed
to settle. Before packing of the scum
(impurely waste matter on the surface of a
wax) of wax is removed with a knife and then
honey is packed in cans or in glass bottles.
19

20. STAFF AND LABOUR
Sr. Particular/Designation No Salary Total
No. Rs
1. Chemist 1 5,000 5,000
2. Skilled worker 2 2,500 5,000
3. Unskilled worker 6 1,500 9,000
Total Salary (1 + 2) 40,500
Perquisites @ 15% of 6,075
salaries
Total 46,575
20

21. ADMINISTRATIVE WORK
Sr. Particular/Designation No. Salary Total
No. Rs.
1. Manager 1 10,000 10,000
2. Accountant/Salesman 1 5,000 5,000
3. Clerk-cum-storekeeper 1 3,500 3,500
4. Peon-cum-watchman 2 1,500 3,000
Total 21,500
21

22. IMPLEMENTATION OF SCHEDULE
The time required for completing each
activity of the project will be as follows :
Sr. Particulars Time
No. Duration
1. Preparation of project 1 month
report
2. Registration & other 1½ month
formalities
3. Selection of site ½ month
4. Arrangement of land ½ month
5. Selection of machinery ½ month
6. Approval of loan by 2 month
financial institute
7. Placement of orders for ½ month
machines
8. Procurement of machinery 2 month
9. Getting of honey from 2½ month
bees
10. Trial & commercial 1 month
production.
Total Time Required 12 months
UTILITIES AND EXPENSES
• Utilities
22

23. Sr. Particulars Amount
No.
1. Power 3,500
2. Water 1,500
Total 5,000
• Other contingent expenses
Sr. Particulars Amount
No.
1. Land & Building rent -
2. Postage & Stationary 500
3. Telephone 2,500
4. Transportation charges 3,000
5. Advertisement & Publicity 10,000
6. Miscellaneous expenses 2,000
Total 18,000
FINANCIAL DETAILS
• SOURCES OF FINANCE
23

24. Sr Particular Owned Commer Co- Total
. s 35% cial operat
no bank ive
. 25% 40%
1. Land, 7,00,00 5,00,0 8,00,0 20,00,
Building 0 00 00 000
and
furniture
2. Machinery 3,98,23 2,34,4 455120 11,37,
& 0 50 800
Equipment
3. Working 4,76,51 3,40,3 344590 13,61,
capital 6 69 475
Total 15,74,7 11,24, 17,99, 44,99,
45 819 710 275
24

25. • DEPRECIATION
Sr. Particular Value Rate Amt
No. of
dept.
1. Land 10,00,000 10% 1,00,000
2. Building 5,00,000 10% 50,000
3. Furniture 5,00,000 10% 50,000
4. Machinery & 11,37,800 15% 1,70,670
Equipment
Total 3,70,670
25

26. CAPITAL INVESTMENT
• TOTAL CAPITAL INVESTMENT
a.Statement showing the total capital
investment.
Sr. Particulars Amount
No.
1. Fixed capital total 31,37,800
2. Total working capital 13,61,475
(3months)
Total 44,99,275
• WORKING CAPITAL DETAILS
A.Statement showing total working capital
requirement.
Sr. Particulars Amount
No.
1. Raw Materials 3,84,250
2. Salaries 46,575
3. Utilities 5,000
4. Other contingent expenses 18,000
W.C. for 1 month 4,53,825
Total working capital for 13,61,475
3 months
• INTEREST ON CAPITAL
26

27. Sr. Particulars Total Amt.(Rs)
No. value
1. Owned (10%) 15,74,746 1,57,475
2. Commercial Bank 11,24,819 1,42,602
3. Cooperative (13%) 17,99,710 2,33,962
Total 44,99,275 5,34,039
27

28. BREAK EVEN POINT
Sr. Particulars Amount
No.
1. Int. on total investment 5,32,039
2. Total Depreciation 3,70,670
3. 40% salary & wages 2,23,560
4. 40% of other contingent 35,400
expenses
Total 11,61,669
Calculation of break even point
BEP = Fixed cost x 100
Fixed cost + profit
= 31,37,800 x 100
31,37,800 + 8,90,079
= 31,37,80,000
4027879
BEP = 77.90 %
28

29. FIXED ASSETS
A. Land, Building, Furniture
Sr. Particulars Rs.
No.
1. Land : 500 sq. meter @ Rs. 10,00,000
2000 per sq meter
2. Building : 200 sq. meter @ 5,00,000
Rs. 2500 per sq. meter.
3. Furniture 5,00,000
Total 20,00,000
29

30. B. Machinery & Equipment
Sr. Particulars Qty Rate Amount
No.
A. Bee-keeping unit (500 colonies)
1. Bee hives 500 800 4,00,000
2. Bee colonies 500 500 2,50,000
3. Hives stand 500 150 75,000
wooden
4. Feeding pots 500 10 5,000
5. Comb foundation 3,500 10 35,000
6. Crude honey 2 5,000 10,000
extractor
7. Migration cards 500 100 50,000
B. Honey processing unit
1. Honey strainer 2 2,000
2. Honey processing 1 15,000
plant with
electric heating
& control system
3. Cap sealing 1 20,000
machine
4. Laboratory 18,000
equipments
electricity over
refractrometer
etc.
30

31. 5. Weigh scale- 16,000
capacity 100 kg.
6. Table weighing 2,000
scale 10 kg.
capacity
8,98,000
Electrification 89,800
&Installa-
tioncharges@10%
7. Office 1,50,000
furniture, tools
etc
Total 11,37,800
C. Statement showing total fixed cost
Sr. Particulars Amount
No.
1. Land 10,00,000
2. Building 5,00,000
31

32. 3. Furniture 5,00,000
4. Machinery & equipments 11,37,800
Total Amt. 31,37,800
COST OF PRODUCTION
• Statement showing the cost of productions
32

33. Sr. Particulars Amount
No.
1. Total Recurring cost 54,45,900
(per year)
2. Total Depreciation 3,70,670
3. Interest on total 5,32,039
capital investment
Total 63,48,609
PROFITABILITY
33

34. Sr. Particulars Amount
No.
1. Sales 82,50,000
2. Less : Cost of Production 63,48,609
3. PBT (Profit before tax) 19,01,391
4. Less : interest on 5,32,039
capital
5. PBIT 13,69,352
6. Less : Income tax @ 35% 4,79,273
7. PAIT (Profit after 8,90,079
interest & tax)
34

35. DETAILS OF SALES
• SALES TURNOVER
Sr. No. Particular Qty Rate Amt
1. 75000 honey 500 gm 110 82,50,000
bottles
of 500 gm each @
Rs. 110 each.
Total 82,50,000
35

36. • PROJECTION OF SALES
Statement showing sales for the next 5
years,
Sr. Particular Year
No s
1 60% 2 70% 3 85% 4 100% 5 100%
.
1 Qty. sold 6250 7292 8854 10417 10417
(p.m.)
2 Qty. sold 75000 87500 106250 125000 125000
(p.a.)
3 Sales 110 110 110 110 110
price
4 Total 8250000
9625000
11687500
13750000
13750000
sales
Value
36

37. RATIO ANALYSIS
1.Rate of return :
= Net profit per year x 100
Cost of Projection
= 8,90,079 x 100
44,99,275
= 19.8%
2.Net Profit Ratio :
= Net profit per year x 100
Sales per year
= 8,90,079 x 100
82,50,000
= 10.79%
37

38. USE OF APPLICATION
In the ancient Egypt & Greece, honey
was used as an all purpose medicine.
 In an average Indian home. Honey is used
in tea, coffee, milk or butter milk in
place of sugar for an attractive &
delicate flavor.
 As it provides energy in a readily
available form, honey is largely taken by
athletes after hard exercise or long
races to regain lost energy.
 Honey acts as an anti-septic ointment. So
it can be applied on cuts, burns & wounds
to give shooting effect.
 Honey prevents tooth decay & early
falling of the teeth. It can also be used
for any type of mouth ulcer.
 Honey-lemon juice mixture will give
relief from cough & cold.
38

39.  Honey is useful for anemic patients as it
builds hemoglobin in the body.
 It will cure constipation & acidity.
 In allopathic science also, honey is
used. Generally we use honey as food, but
now it will enter in operation theatres
also to cure the cancer patients. Thus,
it acts as an antibiotic without any
harmful effects.
39

40. CAPICITY UTILIZATION
The total production capacity per
annum is as follows :
1) Quantity : 60 MTs [1,25,000 bottles
of 500gm]
But in the first year only 60% of
capacity is utilized i.e. 75000 bottled. The
full capacity is utilized in the next 34
years, only to cover up all the costs
involved or utilized in the unit.
Year Production Capacity
capacity utilization
1 75,000 60%
2 87,500 70%
3 1,06,250 85%
4 1,25,000 100%
5 1,25,000 100%
40

41. BASIS AND PRESUMPTION
1.The cost of land is based on the
prevailing rates at Isanpur, Ahmedbad in
the prevailing year 2004 – 05.
2.The cost of contracting build & factory
shed are according to the prevalent rates
in Ahmedabad city.
3.The depreciation rates of Machinery, land
& Build and furniture are fixed as per
government specifications.
4.The interest rates are taken at the
prevailing mkt. rates.
5.The salary & wages have been decided on
the basis of local mkt.
41

42. MARKET ANALYSIS
Honey is a consumable item. It is
used in making of various medicines in the
country. There exits a very good demand for
the product throughout the country & hence
mktg. may not be a problem.
Through honey is the most ancient
ingredient known to humankind, it is yet
favored excessively. The reason is “People
are looking for new things, but familiar at
the same time. The key is to offer a
familiar product/flavor is with a twist”.
200 gm. of honey equals.
 1.135 kg. of milk [OR]
 1.658 kg. of cream [OR]
 340 gm. of meat [OR]
 425 gm. of bondless cod fish [OR]
 8 oranges [OR]
 10 eggs.
42

43. Honey is the ideal sweetener for
health conscious people. Effective honey
mktg. requires more than just hanging up a
sign. It is used as a medicine as lactose in
the form of carrier of almost all
homeopathic medicines.
Nutritive components/contents :
• Calcium : 5 mg
• Iron : 0.9 mg
• Phosphorus : 16 mg
• Vitamin C : 4 mg.
And small amount of vitamin B complex.
September is celebrated as “National
Honey Month”. Due to the various uses &
components of honey, there exists a very
good demand for it, throughout the country.
Thus, we can conclude that the mkt. for
honey is very wide is easily retainable.
43

44. MARKETING STRATEGIES
To compete with competitors in the
market every firm needs to use some
marketing strategies to convince the
customers and to switch over them from one
brand to another brand. Therefore, this firm
will use the following marketing strategies
to make people aware about its product’s and
to convince them to try it once and for
purchasing it again and again.
1) Initially the firm will take part in
different festivex and fun fairs and
gives samples of product of very
small amount for trying it.
2) Then firm will give offer like on the
purchase of four packs of any
size one pack of customers choice of
same size will be given free.
3) The firm will approach each and every
provision store and hotel of
Rajkot and try to convince them to
purchase the honey of its firm.
44

45. COMPETITORS
“Poor firms ignore their
competitors; average firms copy
their competitors; winning firms
lead their competitors.”
Today in this competitive world ZEAL
Honey has got many competitors which are as
follows: -
 Jigar Honey – Rajkot.
 Mahesh Industries – Rajkot.
45

46. RISK FACTORS
When an industry is started there are
many advantages along with its risk factors.
Certain risk factors which arise are as
under:
 Company will operate in highly
competitive with existing and proposed
unit so that to stand among all
competitors is difficult and sometimes
risky.
 Bank finance is limited so expansion
chances get minimized.
In very first year the production
might be less than expected due to new
organization and other so many factors.
46

47. FUTURE PROSPECTS
The future plans of the firms are as
follows.
1. The firms plan to produces more and
more varieties of honey which are not
at presently even available also in the
market.
2. The firm will export its honey.
3. Expansion in the Market and
Distribution areas.
4. Enhancement, in the Installed capacity
of the unit.
5. Increase in the range of products i.e.
Quality, Taste, Flavors and Packing
Method.
6. Participation in the National and Inter
National tread fairs.
47