B-plan Of (beff)

Prepared & Submitted by:

2009 Barekzai

Roll no “9” SY BBA08-09, DM’s college 1/12/2009

DM’s college, Goa University

Delawar

Management Accounting

Business plan

Page 1

Website: www.BarekzaiRedhot.com

Table of contents S#

Topics

Page no

1

Executive Summary

3

2

Vision

3

3

Mission

3

4

Values

3

5

Business positioning strategy

4

Marketing Strategy

4

7

Financial plan

5

8

Capital utilization

5

9

Sales Forecast & Break even analysis

6

Cash flow statement

7

Balance sheet

8

Risk analysis

9

Location Analysis

9

6

10 11 12 13

Website: www.BarekzaiRedhot.com

Executive Summary Barekzai Enterprises for Fast Food (BEFF), Inc. is a small food service company incorporated in January 2009 in Goa that specializes in providing high-quality fast food via restaurants and hotels capital Panjim, Goa. The business is operated under the name Barekzai Redhots. This plan recommends that the board of directors approve borrowing Rs. 200,000 from three current banks to expand marketing and distribution of its current operation in the above mentioned places. Management structure of the BEFF is consisting of Managing director, Sales Manager, Production manager, cleaner, customer service officer, and driver. BEFF provide best quality Italian, American, and Illinois Sandwiches and other fast food product customized by the contractor to meet the expectation of end user.

Vision To become Goa’s first class fast food company, by ensuring high quality standard and taste for customers with reasonable prices, therefore to avoid importing fast food products from other states and robust the sustainable economic growth of the state.

Mission To create a sustainable distribution channels through which we would provide best quality and the taste of our customers’ fast food, meet the customers’ expectation and have best customer relationship in order to expand our business in the future.

Values 1. 2. 3. 4.

Excellent through quality Convenient to customers Uniqueness & freshness Reasonable prices

Website: www.BarekzaiRedhot.com

Business Positioning Strategy In the first page of yahoo there is a sign saying “Barekzai Redhots—satisfy you for Rs.50! You deserve it!” The message is targeted to all passing potential customers who want to indulge themselves inexpensively with fast food in Goa especially in the Panjim. There also may be a subliminal message for sinful or forbidden indulgence, too. This unique selling proposition is selftargeting since only consumers who like fast food and feel that they deserve an inexpensive indulgence will believe this message is meaningful to them. The benefits of this message are relatively unique: “inexpensive satisfaction plus indulgence.” Informal, qualitative research revealed that the target market of busy office workers are constantly in conflict with themselves about wanting a juicy, delicious fast food especially hot dog (Italian Sandwich) and trying to watch the fats and amount of meat in their diets. Moreover, the hot dogs that Barekzai Redhots serves aren’t high in fat. They are high quality, all natural products with no preservatives or harmful chemicals. Barekzai Redhots contractors (hotels, restaurants) make it a point to let customers know that indulging themselves is both inexpensive and healthy.

Marketing Strategy Barekzai targets upscale, youth seeking fast, convenient, portable, breakfast and lunch meals. Barekzai differentiates and positions its business from the competitive fast food and other take-out restaurants with its products (providing high-nutrition, 100 percent all-natural, no artificial ingredients, colors, additives or preservatives convenience foods and snacks), its concern for the environment (biodegradable, recyclable containers/wrappers and PR tie-ins), and its service (a noquestions-asked money-back guarantee of all products sold and the best distributors (hotels and restaurants) who have best-trained company server personnel in the category). Customer loyalty is encouraged with development and promotion of new and revolving seasonal menu selections each quarter, daily customer sampling, and bonus specials. Advertisement promotion To support its expansion efforts, Barekzai Redhots considered using Internet popular webpage such as Google and yahoo pages. Since our advertisement campaign is through internet and customers’ awareness is the most important objective of our business therefore we also strive to make communities in (Face book, orkut, Hi5 and other social electronic networks) to spread out the information about our product and values provided to our customers. Because this business plan anticipates rapid growth through the addition of contract, Barekzai Redhots plans to spend at least 10 percent of net sales during the first year for their promotion. In performing the research into advertising and promotions, it was determined that any broadcast option involved additional production costs that were at least as much as the cost of running a single ad. Website: www.BarekzaiRedhot.com

Financial Plan Barekzai Redhots estimates January sales to reach Rs. 225,000 where in the first month of running the business we reach to the breakeven point. Barekzai has six contracts and options for 24 more contracts with hotels and restaurants in Mapusa and Porvorim. These locations generate an average of Rs. 150,000 in annual sales in one quarter. Since our sells are depending on the season, therefore there will be less sells during rainy season that’s why I have divided annual sales in two parts; first six months and second six months.

Capital Utilization The distribution of my Investment of Rs. 5, 00,000 /- is as follows 1. Rent of flat for production and office purpose in Panjim @ 20,000/month advance Rs. 40,000 2. Administrative expenses (salaries) 3. Advertising (Internet and brochures) 1. Internet 100,000 100,000 4. Other overheads 5. Material and equipments for production 6. License of the business Total

20000 + 2months

Rs. 60, 000/Rs. 45, 000/Rs.100, 000/Rs. 66,000/Rs. 210,000/Rs. 19,000/Rs. 5, 00,000/-

Note: As far as internet is concern, 11,000 for monthly payment to Yahoo and Google and 89,000 are allocated for making website which total of them are Rs. 100,000. We do not give our product directly to end user (consumer). We get orders from our contractors (hotels and restaurants) via phone and internet emails. Website is our fixed asset with the cost of Rs. 89,000 and 11,000 rupees we pay for the first month advertisement expenses.

Website: www.BarekzaiRedhot.com

Sales forecast Sales estimate (in lakhs) first six months 2009 Month Sales

Jan

Feb

Mar

Apr

May

Rs. 225,000

Rs. 250,000

Rs.265,000

Rs.270,000

Rs.280,000

78,400

80,000

87,000

87,100

92,000

146,600

170,000

178,000

182,900

188,000

Salaries & Wages

45,000

45,000

45,000

45,000

45,000

Rent

20,000

20,000

20000

20000

20,000

Overhead

66,000

67,700

75,000

75,000

82,567

Marketing/advertisement in yahoo and Google webpage.

11,000

15,500

20,000

21,000

23,000

Earnings before interest and taxes

4,600

21,800

18,000

21,900

17,433

Taxes and interest

4,600

5,111

5,417

5,520

5,724.5

Rs. 00.0

Rs. 16,689

Rs. 12,583

Rs. 17380

Rs.11,708.5

Cost of Goods Gross sales revenues

Net profit

Broken-even Break-even point (Total Revenue=225,000=Total cost=225,000) where (Fixed cost= Rent &Salaries=45000+20000=65000) and (Variable cost=144,400), (Marketing and promotion expenses=11,000), (Taxes=4,600). Since we had 5, 00,000 rupees to start with this business, we purchased material and equipments (fixed asset) of the remaining amount which total of all is coming 5, 00,000.

Website: www.BarekzaiRedhot.com

Cash Flow Statement By assuming that there is no sales made on account and all are collectable. Therefore; Year 2009

Jan

Feb

Mar

Apr

May

Cash Inflows Opening balance Income

225,000

2,9272 270,000

45,652 280,000

32,5652

Total Cash Inflows

225,00 250,000 281,168 299,272 0 9

00.0 250,000

16,689 265,000

Cash Outflows Investing Activities 144,400

147,700

162,000

162,100

174,567

45,000

45,000

45,000

45,000

45,000

20000 11,000

20000 15,500

20000 20,000

20000 21,000

20000 23,000

4,600

5,111

5,417

5,520

5,724.5

Total Cash Outflows

225,00 0 233,311 252,417 253,620

268,291. 5

Ending cash balance

Rs.00. 0

Rs.57,3 60.5

Costs and expenses Operating Activities Salaries and Wages Fixed Business Expenses (Rent) Marketing/ promotion Tax & Interest

Website: www.BarekzaiRedhot.com

Rs.16, 689

Rs.29, 272

Rs.45, 652

Balance Sheet Balance Sheet as of 31th May 2009 Assets

Liabilities

Current assets Cash Accounts receivable Inventory Prepaid expenses Total current assets

Current liabilities

Rs.57,360.5

Short-term notes payable

12,00

11,000

Long-term notes payable

24,00

Sales taxes payable

5,800

3,600 Rs.279,321

Employment taxes payable Accrued payroll

80,000

Total current liabilities

food preparation equipment

210,000 Long-term liabilities

food storage equipment

13,514.5

furniture and equipment

7,400

(less depreciation) Total long-term assets

Total assets

Website: www.BarekzaiRedhot.com

Rs.289600

207,360.5

Long-term assets Web site

Accounts payable

24,785.5 Rs. 323400

Loans

92000

Total long-term liabilities

92000

(32,875) Total liabilities Rs.278039.5 Owner’s equity

Rs. 557,360.5

0

Total liabilities & owner’s equity

Rs. 415785.5 Rs.141,575

Rs. 557360.5

RISK ANALYSIS The risks involved in this project are: •

Demand is lower than expected;

•

Tough competition;

•

People disposable income is lower than anticipated;

•

Product is copied by competitors;

•

Unmet product development schedule;

•

Unable to assure the quality of the product and increasing in number of scraps;

•

High inflation, resulting in higher prices of raw material;

LOCATION ANALYSIS The main production house is located at panjim, which is a large market for hot dogs (Sandwiches) being fast food. We can procure our raw materials from panjim market very easily. Because our production house is located close to market and there is no cost of transportation and shipment of raw materials.

Website: www.BarekzaiRedhot.com