Feasibility Report

BUSINESS PLAN

OF Avash Deary and Bakery

Nijgadh-8, Bara
To,

Branch Manager

Kumari Bank Ltd.

Nijgadh, Bara

Project Report

We have compiled the project report of Avash Deary and Bakery accompanying projected
balance sheet, income statement, cash flow statement and assumptions for the period from 1st
Shrawan 2076 to 31st Ashad 2080.

Kindly provide us Business Overdraft Loan of NPR 1 Million in the F/Y 2077-78 for
investment and working requirement of the project.

Hoping for your kind acceptance of the same.

Arpana Neupane
Proprietor
Avash Deary and Bakery
Nijgadh-8, Bara
1. Business Profile and Current Status

Name of Business Avash Deary and Bakery

Registered Office Nijgadh-8, Bara
Address
Type of Business Proprietorship Business
PAN Number 605153891
Registered Body Department of Cottage & Small Industry,
Kalaiya-Bara / Inland Revenue Office Simara Bara

Name of Arpana Neupane

Proprietor
Ownership of Rented
Outlet
Registered date
2076.04.06
Experience 1 years of Experience in same business.
Human Resources Family Members

2. Mission, Vision & Objective of business

Mission
To be number one choice for bakery and dairy products around Nijgadh periphery by serving
quality of products and service to individual customer.

Vision
We aim at making Avash Deary and Bakery substitute name for bakery and dairy products
available around Nijgadh municipality periphery.
 Objectives of Business:

Following are the Objective of Business:

 To provide good and high quality products.
 Create new employment opportunities.
 To develop rational and sustainable business.
 To establish long-term planning for the benefit of the consumers and our personnel
through the setting of a business plan and long-term goals.

3. PESTEL Analysis
Political

 Government policies and regulations are favorable to the traders and producer of dairy
products.

 Subsidy has been provided to women entrepreneur so the women are encouraged in
establishing business.

Economic
 Return from dairy products and bakery items is quick and yield is good.
 Creates new market to farmers involved in milk production and there products get good
monetary value.
Sociological
 Improved helath & Safety Standards
 Fair Trade Social Projects

Technological

 Potential for technology Sharing.

 Governmnet funds to upgrade technology.

Environmental
 Less Agro-Chemicals
 More environmentally friendly products
 Proper waste disposal & recycling
 Legal

The firm has been registered under Department of Cottage & Small Industry, Kaliya Bara
and Inland Revenue Office Simara Bara.

As Discovered in PESTEL analysis, there are certain key opportunities for the development of
the traders of bakery and Dairy products Nepal. With political support, economic opportunity
and growing technological skills the sector appears to be in a good position for growth.

4. Sector Analysis of Dairy and Bakery

Practices of Dairy and Bakery In Bara

In Bara District, maximum number of inhabitants are involved in livestock farming. Livestock
farming is being commercialized and the number of such entrepreneurs are rising in the area.
However, still demand of milk and dairy products in the area are higher than its supply. Hence
the firm doesn’t have any hassles regarding sale of its products. There are many advantages in
context of operating Dairy and Bakery shop which are listed below:

1. Market
Avash Deary and Bakery primarily targets to supply the product to local individuals, schools,
college, cooperatives, social institutions, hotels etc. of Nijgadh Municipality.

2. Manpower
We shall be operating firm with active participation of husband and wife. Husband shall be
looking for administrative and marketing work and I (Arpana Neupane) shall be looking for
operational works.

3. Availability of Resources
Resources which are required for dairy and bakery are raw material (i.e. milk and finished
bakery items which are easily available), energy, staff and other knowledge which is easily
available.

4. Financial Support
Financial support means loans, guarantees, credits, contributions which are fully supported
from bank and our own equity also. There is no issue on financial support in our firm.

5. Geographically favourable

Most of the area of Nijgadh area is commercially suitable for trading of dairy and bakery
items because of presence of schools, college, cooperatives, social institutions, hotels etc.
Hence the production potential is high.

6. Competitiveness
There are many other individual farmers, units, dairies etc. involve in dairy business.
However, still demand of milk and dairy products in the area are higher than its supply.
Hence the firm doesn’t have any hassles regarding sale of its products
5. Current Position of the Farm
Avash Deary and Bakery is a firm involved in production of dairy products and trading of dairy
products and bakery since last 1 years with vision and hopes to make Avash Deary and Bakery
substitute name for bakery and dairy products available around Nijgadh municipality periphery.

We have done our detailed market research and feasibility studies and we were able to secure a
suitable area for our firm’s outlet.
Our unit is going to be a number one choice for bakery and dairy products around Nijgadh
periphery by serving quality of products and service to individual customer.
Asides from the fact that we have secured the required room for outlet and most of the advanced
equipment and machines. We have also attended training and undergoing training to be able to fit
into the ideal picture of the dairy and bakery shop.

We are aware of the importance of building a solid business structure that can support the picture
of the kind of class business we want to own. This is why we are committed with full dedication.

Our Project covers the total 2 rented rooms .

6. Marketing Analysis
Market Trends
Milk and its by-products are always demanded and bakery products are also demanded for
breakfast, tiffin use and celebration of functions like birthday, anniversary and others. Individual
person, schools, college, cooperatives, social institutions, hotels etc. are targeted customer of
unit. The demand for dairy products and bakery is on the increasing trend and it is indeed
profitable.
Our Target Market

It is a known fact that the target market of unit is whole area of Nijgadh Municipality. Almost
every household consumes product dealt by unit.
We will ensure that we position our business to attract consumers of the bakery items and dairy
products not just in the alone but also other parts of the vicinity which is why we will be
aggressive in our sales activities.

Our Competitive Advantage

The truth is that it is easier to find entrepreneurs flocking towards same nature of business that is
known to generate consistent income which is why there are more entrepreneurs operating dairy
and bakery shop.

Avash Deary and Bakery is fully aware that there are competitions in dairy business all over the
Nepal, which is why we decided to carry out thorough research so as to know how to take
advantage of the available market in all the parts of Njgadh.

We have done our homework and we have been able to highlight some factors that will give us
competitive advantage in the marketplace; some of the factors are ample knowledge in related
filed and personal network that can help us sell our products at competitive prices, good network
and excellent relationship management.
7. SWOT Analysis
Strength

 The unit is located at mid center of Nijgadh Market and eye catchy location.
 High demand of the products in the market.
 Suitable location with availability of all the required infrastructure facility.

Weakness

 We are a new unit in Nijgadh Municipality perhaps the fact that we decided to diversify our
business activities could count against us too. We are aware of this and from our projection, we
will overcome this weakness with time and turn it to a major advantage for the business.
Opportunity

 Dairy shop specially operated by women’s is classified as Priority Sector business by the Nepal
Rastra Bank. Accordingly, under the mandatory clauses, all commercial and developments banks
will be interested to provide fund if the unit is managed professionally.
 With the growing population/market there is maximum demand of these products

Threats
 Unstable political situation and weak and deteriorating security situation of the country.
 Increasing number of competitor within same location.

8. Investment Plan
Source and Use of Financing

Presently we are requesting for 1M for investment & Working Capital Requirement of the project.

9. Expenses Plan
Milk and its by-products are always demanded and bakery products are also demanded for breakfast, tiffin
use and celebration of functions like birthday, anniversary and others. Local individuals, schools, college,
cooperatives, social institutions, hotels etc. are daily customer of unit. The realizations of funds from our
customer will take around 60-90 days and we cannot afford to wait until the realization of fund as we have to
perform business regularly. So, we are in need of working capital in order to meet various requirement of the
unit. Hence we have requested to provide OD limit of NPR 1,000K for the smooth operation of the unit. As
per our report of 25 November, 2020 we are in need of NPR 1,500K working capital and hence demanded
amount shall be used in business for smooth operation.
10. Sales Plan

We will adopt the following strategies in marketing our products;

 Introduce our business by conducting door to door campaign.

 Attend related trainings and seminars on dairy operation and management
 Engage in direct marketing
 Encourage the use of word of mouth marketing (referrals)

11. Financial Analysis

Justification for Proposed Investment

Overdraft loan (revolving) taken for meeting working capital requirement shall be used wisely.
Different financial indicators and ratios also justifies limit asked by unit.
Analysis of major ratios of the project shows positive indication for the project

Assumptions Underlying Projected Financial Statements:

a) Sales Revenue
Sales revenue comprises of income from Sales of dairy products and bakery items. The Sales
Revenue is assumed to increase at 5-6% each year.

b) Expenses

i. Administrative Expenses
The administrative expense is assumed to increase at 7-10% each year.

c) Depreciation

Depreciation is provided on written down value method.

12. Conclusion
Dairy products and bakery items are daily consumable goods by people of all economy class.
Demand for dairy products are always demanded and with the growing population/market there is
maximum demand of these products.
The project is technically feasible, environmentally sound, managerially capable, and socio-
economically viable and commercially suitable. Based on all these financial indicators of the
project are positive for the promotion of the project, it is kindly requested to sanction the
overdraft facility to unit.

Attachments

a. Audited and Projected Financial Statements

b. Certificate of Permanent Account Number
c. Registration copy from Department of Cottage & Small Industries