A Business Plan

For Starting
REAL CHOCOLATE COMPANY

Submitted to
Sudipta Das
Guest Faculty, Dept of Rural Studies

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 Table of Contents

Sl. No. Contents

1 Confidentiality Agreement
2 Executive Summary
3 General Company Description
4 Objectives
5 Target Market
6 About the Chocolate Industry
7 Core Competencies
8 Ownership
9 SWOT ANALYSIS
10 Competitor Analysis
11 Our Products
12 Competitive Advantage
13 Marketing Strategy
14 Sales Strategy
15 Research & Development
16 Financial Projections
17 Break-even Point
18 Funding Requirements
19 Risks

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 1. Confidentiality Agreement

Business Plan
Name of the Company; Real Chocolate
Prepared By: (i) Saurav Bhattacharjee, (ii) Sagar Atri, (iii) Shalini
Bhattacharjee, and (iv) Arijit Bhattacharjee.
DD-MM-YY:

The undersigned reader acknowledges that the information provided in

this business plan is confidential, therefore, the reader agrees not to
disclose it without the expressed written permission of the
Company/Promoter.

It is acknowledged by the reader that information to be furnished in this

business plan is confidential in nature, other than information that is
public domain through other means, and that any disclosure or use of this
confidential information by the reader may cause serious harm or damage
to Company.

Upon request, this document is to be immediately returned to

Company/Promoter.

Signature-
Saurav Bhattacharjee
Sagar Atri
Shalini Bhattacharjee
Arijit Bhattacharjee

Date-22/12/2021

This is a business plan. It does not imply offering of securities.

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 2. Executive Summary:
We are starting a business of manufacturing chocolates. Name of the
company is Real Chocolate Company. Our Target market is West
Tripura. The Customers to whom our products will be supplied are
retailers, wholesalers, and traders in Batalla, GB Bazar, Radha Nagar,
Udaipur. The location of our manufacturing plant would be Bodhjung
Nagar Industrial Park, Agartala.
We would be targeting the customers of all age group. The product that
we would offer are
1. Plain Chocolate
2. Milk Chocolate
3. Sweet and Nut Chocolate
The core competencies on which our company would be competing are
taste and quality of our chocolates. Our company would be a partnership
firm. There would be 1 Finance-Manager/Accountant, 1 marketing
manager, 5 Sales Executive and 20 Machine Operators for 3-shifts as a
part of organization.

3. General Company Description:

Our company will be in the confectionary business. Our company will be
involved in manufacturing of chocolates.
Vision:
Our vision is to be the leading manufacturer of chocolate all over India.
Mission:
We seek to produce high quality products at competitive price using
modern technology to provide high satisfaction to the consumers.

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 4. Objectives:
• To manufacture and provide the customer with the quality products
to the best interest of consumer.
• To create price competitive product as part of the effect to increase
the world excess to high quality chocolates.
• To ensure a hygiene and clean working environment as to continue
to produce safe and tasty product.
• To strive to meet an exceed customers’ expectations so as to ensure
a sustainable business relationship.

5. Target Market:
1. Upper Class.
2. Middle Class.
3. Lower middle Class.
4. All age groups.

6. About the Chocolate Industry:

The chocolate market is estimated around 33,000 tons valued at
approximately Rs. 8 billion. Bars of moulded chocolate like Amul Milk
Chocolate, Dairy Milk, Truffle, Nestle Premium, and Nestle Milky Bar
comprise the largest segment, accounting for 37% of the total market in
terms of volume. To push sales chocolate company has been targeting
mainly adult audiences. Chocolate are being presented as snack food for
the new target audiences. The chocolate segment is characterised by high
volume, huge expenses on advertising, low margins, and price sensitive.
Cadbury is the leading player in the chocolate market industry with the
penetration of 70% market share. The companies products like 5Star,
Gems, Eclairs, Perk, and Dairy Milk are leaders in their segment. Nestle
and Amul are the other major players in the chocolate industry. Chocolate
industry is growing at steady growth rate of 25%. Over 75% of the
consumption of chocolates takes place in the urban market. It is a price
sensitive market.
Until early 90’s Cadbury has a market share of over 80% but its party was
spoiled when nestle appeared on the scene. The other one has introduced
its international products in the country (KitKat, Lions), and now
commands approximately 15% market share. The two companies
operating in the segment are Gujrat Co-operative Milk Marketing
Fedaration (GCMMF) and Central Arecannut and Cocoa Manufacturers
and processors co-operations (CAMPCO). Competition in the segment

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will soon get keener as overseas chocolate giants Harshey’s and Mars
Consolidate to grab bite of the Indian chocolate pie. Indian Chocolate
Industy’s margin range between 10-20% , depending on the price point at
which the product is placed. The input cost in India are under check owing
to the 24% decline in the prices of sugar.

7. Core Competencies:
The core competencies on which our company will compete are:
• Taste
By consuming the “Real Chocolates” flavour begins to feel your
mouth the movement chocolate begins to melt in your tongue like
butter and it taste like pure chocolate rather than cocoa powder. At
first there is so much pleasure in tasting chocolate, it may be difficult
to focus on the specific of flavour. First perception of the consumer
would describe for the chocolate as “Real” and “Yummy”.
• Quality
The raw ingredients are of finest quality and also care is taken of
production process: Roasting and Crushing the Cocoa Beans and
mixing the Cocoa paste with sugar and other ingredients such as
milk. Real Chocolates are high quality chocolate as they are shiny,
brown, breaks cleanly and is smooth. Real Chocolates has the
sufficient quantities of Cocoa powder and vegetable fat so that it
doesn’t become greasy or sticky at ambient room temperature.

8. Ownership:
Our company will be a partnership firm.

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 9. SWOT ANALYSIS:
Strength
1. Good quality of chocolates which will be customers favourite.
2. Price would be reasonable so that more consumers will purchase.
3. Unique selling proposition for unique taste of chocolate.
Weakness
1. Lack of product mix or product baskets which others brand has.
2. Still not a export quality.
3. Packaging is less attractive.
4. Lack of innovative and designer chocolates in festive season.
Opportunities
1. Covers all the nearby areas of West Tripura where there is high
demand.
2. Increase the product range as
a. Jellies
b. Toffies
c. Bars
d. Lollipops
e. Gums
f. Unsweetened baked chocolates for garnishing.
Threats
1. Many big players have major position in the market like Cadbury,
Nestle, Kit Kat, Lions, etc.
2. Highly qualified employees in the big brands.
3. Huge investment on advertisements by other brands.
4. In peak time public purchase generally branded chocolates and
local manufacturers are ignored.

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 10. Competitor Analysis:
Company Founded In Brand
Portfolio(Confectionery
Products)
Nestle 1860s Kit Kat, Smarties,
Wonka
Amul 1945 Milk Chocolate, Fruit &
Nut Chocolate
Hershey’s 1894 Hershey’s Milk
Chocolate, Milk Duds,
Kisses, Pots of Gold,
etc.
Cadbury 1948 (Indian Dairy Milk, Dairy Milk
Market) Fruit & Nut, Dairy Milk
Roasted Almond, Dairy
Milk Silk, etc.
Ferrero 1940s Rocher, Raffaello,
Kinder, etc.
Mars 1911 Mounty, Galaxy,
Snickers, Milkyway,
Mars, etc.
ITC 2002 Minto and Candyman
(Confectionary
Segment)
Parle 1929 Melody, Mango Bite,
Poppins, Kismi Toffee,
Mazelo, Eclairs, etc.

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 11. Our Products
Our Company will be dealing in manufacturing of 3 products. They are:
1. Milk Chocolate
2. Fruit & Nut Chocolate
3. Plain Chocolate

12. Competitive Advantage:

➢ Our products will be trendy in taste and quality.
➢ Price of the product will be lower than that of the competitors.
➢ Our products will be unique and bring a new taste of chocolates.
➢ Our product will have sufficient quantities of Cocoa powder and
vegetable fat so that it doesn’t become greasy or sticky at ambient
room temperature.
13. Marketing Strategy:
We will do advertisement for local TV channels, local newspapers,
delivering Leaflets and Banners. Specific marketing strategies will be as
follows.
➢ Huge delivery to local markets.
➢ Providing Max profit to the shopkeepers.
➢ Providing Incentives to the retailers and shopkeepers.
14. Sales Strategy:
➢ Market. We will sell the product by all means including on directly,
retail, distributor, agent, sales representatives & social media sites.
➢ Pricing. We will provide whatever products we produce to our
customers without compromising with the quality if the product and
thereafter when the product will reach in the market it will catch
everybody’s attention. Then we will adjust our price according to the
market. But initially our assumption all products will be available
from Rs 1900/kg onwards.
15. Research and Development:
We will follow action research methodology to increase, improve and
develop our business. A group of officials will look after the problems and
find their solutions that will be implemented and so on.

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 16. Financial Projection:
Budget:

Particulars 1st Year 2nd Year 3rd Year Total

Investment Rs Rs 0 Rs 0 Rs
50,00,000 50,00,000
Loan @ 5% Rs Rs 0 Rs 0 Rs
50,00,000 50,00,000
1,00,00,000
Machineries:

Particulars 1st Year 2nd Year 3rd Year Total

Sugar Rs 1,50,000 Rs 0 Rs 0 Rs 1,50,000
Grinding
Machine
Chocolate Rs 1,00,000 Rs 0 Rs 0 Rs 1,00,000
Melting
Machine
Chocolate Rs 2,00,000 Rs 0 Rs 0 Rs 2,00,000
Conching &
Refining
Machine
Chocolate Rs 50,000 Rs 0 Rs 0 Rs 50,000
Storage Tank
Chocolate Rs 1,00,000 Rs 0 Rs 0 Rs 1,00,000
Tempering
Machine
Chocolate Rs 3,50,000 Rs 0 Rs 0 Rs 3,50,000
Molding
Machine
Chocolate Rs 2,50,000 Rs 0 Rs 0 Rs 2,50,000
Packaging
Machine
Total Rs Rs 0 Rs 0 Rs
12,00,000 12,00,000

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Fixed Cost:

Particulars 1st Year 2nd Year 3rd Year Total

Land Rs 8,00,000 Rs 0 Rs 0 Rs 8,00,000
Building Rs Rs 0 Rs 0 Rs
10,00,000 10,00,000
Furniture Rs 1,00,000 Rs 0 Rs 0 Rs 1,00,000
Total Rs Rs 0 Rs 0 Rs
19,00,000 19,00,000

Recurring Cost:

Particulars 1st Year 2nd Year 3rd Year Total

Electricity Bill
Rs 30,000 Rs 32,000 Rs 37,000 Rs 99,000
Transportation Rs 1,00,000 Rs 1,10,000 Rs 1,15,000 Rs 3,25,000
Advertisement Rs Rs Rs Rs
2,00,000 2,00,000 2,00,000 6,00,000
Telephone Bill Rs 10,000 Rs 10,000 Rs 10,000 Rs 30,000
Interest on Rs 2,50,000 Rs 2,50,000 Rs 2,50,000 Rs
Loan @5% 2,50,000
Total Rs 5,90,000 Rs Rs 6,12,000 Rs
6,02,000 17,04,000

Raw materials cost:

Particulars 1st Year 2nd Year 3rd Year Total

Raw Rs Rs Rs Rs 98,00,000
Materials 30,00,000 32,00,000 36,00,000
Chemicals Rs Rs Rs 4,00,000 Rs 9,00,000
2,00,000 3,00,000
Total Rs Rs Rs Rs.
32,00,000 35,00,000 40,00,000 1,07,00,000

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 Employee Charge:
Particulars No’s 1st Year 2nd Year 3rd Year
Machine Operator 20 12 Months* Rs 12 Months* Rs 12 Months* Rs
10,000 = Rs 10,000 = Rs 10,000 = Rs
120,000/Person 120,000/Person 120,000/Person
Accountant/Finance 1 12 Months * Rs 12 Months * Rs 12 Months * Rs
Manager 10,000 = Rs 10,000 = Rs 10,000 = Rs
1,20,000/Person 1,20,000/Person 1,20,000/Person
Marketing Manager 1 12 Months * Rs 12 Months * Rs 12 Months * Rs
15,000 = Rs 15,000=Rs 15,000 = Rs
1,80,000/Person 1,80,000/Person 1,80,000/Person
Sales Executive 5 12 Months * Rs 12 Months * Rs 12 Months * Rs
8,000 = Rs 8,000 = Rs 8,000 = Rs
96,000/Person 96,000/Person 96,000/Person
Security Cost Rs 2,00,000 Rs 2,00,000 Rs 2,00,000
Total 27 Rs 33,80,000 Rs 33,80,000 Rs 33,80,000

Split-up Cost:

Particulars 1st Year 2nd Year 3rd Year Total

Machineries Rs 12,00,000 Rs 0 Rs 0 Rs
12,00,000
Recurring Rs 5,90,000 Rs Rs Rs
Cost 6,02,000 6,12,000 17,04,000
Raw Rs 32,00,000 Rs Rs Rs.
material 35,00,000 40,00,000 1,07,00,000
cost
Employee Rs 33,80,000 Rs Rs Rs
Salaries & 33,80,000 33,80,000 1,01,40,000
Wages
Total Cost Rs.83,70,000 Rs. Rs Rs.
74,82,000 79,92,000 2,37,44,000

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For the 1st Year:

Total cost of raw materials= Rs. 32,00,000

Price per kg = Rs. 500
Total raw material (in KG) = 32,00,000/500= 6400 kg
1.5 KG Raw Material can produce 1kg Finished product
Total finished goods (in KG) = 6400/1.5=4,266 kg
Total finished goods= 4,250 (without wastage)
Employee salary+ recurring cost= 33,80,000+5,90,000=
39,70,000
=
40,00,000(approx.)
(Employee salary + recurring cost) per month = 40,00,000/12=
3,33,333= 3,50,000(approx.)
Total cost per month = fixed cost+ row material cost
= 3,50,000+32,00,000= 35,50,000
Finished goods cost per kg= 35,50,000/4250= 835/kg approx.

Production & sales detail for 1 month:

Produ Produ Quanti Cost Total Total Selling

ct ct ty in per Cost Price(2500/kg)
weigh weigh gm. unit Price
t (in t in kg
gm)
10 gm 1500 1,50,0 8.35 12,52,2 8.70*1,50,000=13,0
00 50 5,000
20 gm 1000 50,00 16.7 8,35,00 17.35*50000=8,67,5
0 0 00
50 gm 1000 20,00 41.7 8,35,00 43.25*20000=8,65,
0 5 0 000
100 750 7,500 83.5 6,26,25 87*7500=6,52,500
gm 0 0
Total 35,48,5 36,90,000
00

Selling cost (sales man incentives, offers to retailers, whole

sellers) = 1,30,000

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For the 2nd Year:

Total cost of raw materials= Rs. 35,00,000

Price per kg = Rs. 510 (due to increase in price)
Total raw material (in KG) = 35,00,000/510= 6862 kg (approx.)
1.5 KG Raw Material can produce 1kg Finished product
Total finished goods (in KG) = 6862/1.5=4,575 kg(approx.)
Total finished goods= 4,550 (without wastage)
(Employee salary & wages +recurring cost) per
month=40,00,000/12=3,33,333= 3,50,000(approx.)
Total cost per month= 35,00,000+ 3,50,000= 38,50,000
Finished goods cost per kg = 38,50,000/4,550 = 846
(approx.)/kg

Production & sales detail for 1 month:

Produ Produ Quanti Cos Total Total Selling

ct ct ty in t Cost Price(2500/kg)
weigh weigh gm. per Price
t (in t in kg unit
gm)
10 gm 2000 2,00,0 8.4 16,92,0 8.85*200000=17,70
00 6 00 ,000
20 gm 1000 50,000 16.9 8,46,00 17.75*50000=8,87,5
2 0 00
50 gm 800 16,000 42.3 6,77,00 44*16000=7,04,00
0 0
100 750 7,500 84. 6,34,50 88*7,500=6,60,000
gm 6 0
Total 38,49,5 40,21,500
00

Selling cost (sales man incentives, offers to retailers & whole

sellers, miscellaneous expenses) = 3,30,000

Total Cost= 1st Year Cost + 2nd Year Cost

= Fixed Cost + 1st Year Variable Cost + 2nd Year
Variable Cost + 2nd Year Maintenance Cost
= (35,48,500*12=4,25,82,000) +
(38,49,500*12=4,61,94,000)
+19,00,000+12,00,000+6,62,000= 9,25,38,000

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Total Sales = 1st Year Total Sale – first year incentives + 2nd Year
Total Sale- 2nd year incentives
= (36,90,000*12=4,42,80,000-1,30,000)+
(38,88,000*12=4,66,56,000-3,30,000) = 9,25,38,000

For the 3rd Year:

Total cost of raw materials= Rs.40,00,000

Price per kg = Rs. 515 (due to increase in price)
Total raw material (in KG) = 40,00,000/515= 7767 kg (approx.)
1.5 KG Raw Material can produce 1kg Finished product
Total finished goods (in KG) = 7767/1.5=5,177 kg(approx.)
Total finished goods= 5,100 (without wastage)
(Employee salary & wages +recurring cost) per month=
39,92,000= 40,00,000 (approx.) =40,00,000/12=3,33,333=
3,50,000(approx.)
Total cost per month= 40,00,000+ 3,50,000= 43,50,000
Finished goods cost per kg = 43,50,000/5,100 = 852
(approx.)/kg

Production & sales detail for 1 month:

Produ Produ Quantit Cost Total Total Selling

ct ct y per Cost Price(2500/kg)
weight weight unit Price
(in in kg
gm)
10 gm 2200 2,20,0 8.52 17,04,0 9*200000=18,00,0
00 00 00
20 gm 1000 50,000 17.0 8,52,00 17.80*50000=8,90,
4 0 000
50 gm 1000 20,000 42.6 8,52,00 44.25*20000=8,85,
0 000
100 900 9,000 85.2 7,66,00 88.50*9000=7,96,5
gm 0 00
Total 41,74,0 43,71,500
00

Selling cost (sales man incentives, offers to retailers & whole

sellers, miscellaneous expenses) = 3,50,000

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Gross Profit = (Sales – Cost Price) * 12 = (43,71,500-41,74,000)
* 12 = 23,70,000
Net Profit = Gross Profit – Maintenance Cost - Incentives &
Offers
= 23,70,000 – 6,70,000 – 3,50,000
= 13,50,000 (approx.)

17. Break-Even Point:

It is a certain point where there is no profit and no loss and it also
explains the relationship between the sales revenue, fixed cost & variable
cost. This is the most important technique which is used in managerial
decision making and managerial planning.
Break-even point of our business will be achieved after 2nd year where
total cost will be equal to the sales revenue. In first year of our business,
we will not recur any profit. The profit will take place from the third year.

Break-Even Point= Total Sales-Total Expenditure=0

= 9,25,38,000-9,25,38,000=0

18. Funding Requirements

• Promoters Fund= 50,00,000
• Banking Lending= Rs 50,00,000

19. Risks:
➢ Fire is an absolute risk factor for any industry which is
unpredictable and vulnerable as well.
➢ Unavailability of raw material due to various natural factors could
be a risk.
➢ Emergence of competitors could be a risk.
➢ Unavailability of skilled laborers might occur and that’s certainly a
risk.
➢ Natural calamities are unpredictable and are of high risk for the
enterprise.

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