A Project report on Home Breads.

At As a part of partial fulfilment of the curriculum of BBA Submitted By

Karan Sharma (180) Aashis Rawal (152) Nirag Shah (167)

Nirbhay Desai (136) Submitted to:Radha mem.

TABLE OF CONTENTS INTRODUCTION BUSINESS ENVIRONMENT THE OPPORTUNITY: SMALL SCALE BAKERY OPERATIONS PRODUCTION PROCESS AND TECHNOLOGY REQUIREMENTS FOR BAKERY SETUP ANNUAL FINANCIAL PROJECTIONS FINANCING SOURCES

INTRODUCTION...
Welcome to Home Breads.
Our experience is unmatched and our reputation is firmly established. is a manufacturing company featuring premium quality frozen, fully finished and packaged baked products .
An in-depth understanding of the consumer psyche has helped evolve a marketing philosophy that reflects the needs of the consumer. With products designed keeping both health and taste in mind, appeals to both health conscious mothers and fun loving kids. The great tradition of taste and nutrition is consistent in every pack on the store shelves, even today. The value-for-money positioning allows people from all classes and age groups to enjoy products to the fullest.

The intent was to spread joy and cheer to children and adults alike, through our bakery products. The brothers knew that it wouldn't be an easy task, but they decided to take the brave step. A small factory was set up in the outskirts of surat . The starting days were full of difficulties due to lack of equipment lack of money but what the brothers didn't lack was confidence and belief in themselves. Moreover they did not knew the marketing aspects of those days. In those days days the only way to bake biscuits were in the traditional ovens or bhatthi. They used to sell the products themselves by reaching out to the people through bicycles all over the city, and also by train on the outskirts.

Initially as people knew about the bakery the brothers started whole selling the products and soon they were giving their products to over 300 shops in and around the city and soon the production of the company was increased. After that we came in the retail market through our own shop outlet. Today 40 years down the line we believe in QUALITY AND CUSTOMER SATISFACTION.

SCOPE...
Hygiene is the precursor to every process at Home brads. From husking the wheat and melting the sugar to delivering the final products to the store shelves, care is taken at every step to ensure the best product of long-lasting freshness. Every batch of biscuits and confectioneries are thoroughly checked, hence ensuring the same perfect quality. Concentrating on consumer tastes and preferences, the brand has grown from strength to strength ever since its inception. Doctors used to recommend our biscuits to the patients and hence the popularity of those biscuits has increased. Biscuits are low in calorie value and are easily digestible. Once the patient regains his strength, doctor advises him to eat biscuits with fat. The biscuits are made using excess shortening.

PRODUCT...

PASTRIES

BISCUITS

BREADS

TOAST

CAKES

MUFFINS

MARKETABILITY....
Bakery product promotion has to be done mainly through word to mouth and to ensure that its available to major hyper market and super markets .leaflets to be distributed in major colonies In this sector, marketing is done by the people itself. But in the initial stages of the business marketing is very much necessary. And as it is the small scale industry it does not have enough resources to do add. In any kind of things. Operators have told us they are seeking business and technical baking support, Foodservice division. Through the Pillsbury Bakery Institute, were providing the recipe for success in todays competitive business environment by sharing our talent, expertise and resources with the bakery industry. Baking professionals will strengthen both their bench and their business skills through these classes. If the consumer will get good taste and that too at reasonable price than he/she will automatically come at the same place and will lwt other know the same place or will suggest them to go to the same place. So, in this sector marketing is done at low level and publicity plays the main role in it.

LOCATION...
Home Breads in Ghoddod Road, Surat
Category: Bakery

Address: #L6/7, Ground Floor Shiv Smruti Complex Ghoddod Road Surat -395001 Landmark: Near Elbee Park Phone:0261-2236719

Contact Person: Anil Tibrawal

ADVATAGE OF LOCATION :Being in the right location is a key ingredient in a business's success. If a company selects the wrong location, it may have adequate access to customers, workers, transportation, materials, and so on. Consequently, location often plays a significant role in a company's profit and overall success. A location strategy is a plan for obtaining the optimal location for a company by identifying company needs and objectives, and searching for locations with offerings that are compatible with these needs and objectives. Generally, this means the firm will attempt to maximize opportunity while minimizing costs and risks.

Location should be chosen in such a way that it should be regularly visited by the people and should not not be far away of the people.

SOURCES OF FINANCES...

Often the hardest part of starting a business is raising the money to get going. The entrepreneur might have a great idea and clear idea of how to turn it into a successful business. However, if sufficient finance cant be raised, it is unlikely that the business will get off the ground. There are many sources of finances, which are as follows :-

Internal sources:-

Retained profits:This is the cash that is generated by the business when it trades profitably another important source of finance for any business, large or small. Note that retained profits can generate cash the moment trading has begun. For example, a startup sells the first batch of stock for 5,000 cash which it had bought for 2,000. That means that retained profits are 3,000 which can be used to finance further expansion or to pay for other trading costs and expenses.

Share capital invested by the founder:The founding entrepreneur (/s) may decide to invest in the share capital of a company, founded for the purpose of forming the start-up. This is a common method of financing a start-up. The founder provides all the share capital of the company, retaining 100% control over the business.

External sources:A bank loan:Provides a longer-term kind of finance for a start-up, with the bank stating the fixed period over which the loan is provided (e.g. 5 years), the rate of interest and the timing and amount of repayments. The bank will usually require that the start-up provide some security for the loan, although this security normally comes in the form of personal guarantees provided by the entrepreneur. Bank loans are good for financing investment in fixed assets and are generally at a lower rate of interest that a bank overdraft. However, they dont provide much flexibility.

Share capital outside investors:For a start-up, the main source of outside (external) investor in the share capital of a company is friends and family of the entrepreneur. Opinions differ on whether friends and family should be encouraged to invest in a start-up company. They may be prepared to invest substantial amounts for a longer period of time; they may not want to get too involved in the day-to-day operation of the business. Both of these are positives for the entrepreneur. However, there are pitfalls. Almost inevitably, tensions develop with family and friends as fellow shareholders.

Business angels:Are the other main kinds of external investor in a start-up company. Business angels are professional investors who typically invest 10k - 750k. They prefer to invest in businesses with high growth prospects. Angels tend to have made their money by setting up and selling their own business in other words they have proven entrepreneurial expertise. In addition to their money, Angels often make their own skills, experience and contacts available to the company. Getting the backing of an Angel can be a significant advantage to a start-up, although the entrepreneur needs to accept a loss of control over the business.

Personal sourses:Savings and other nest-eggs:An entrepreneur will often invest personal cash balances into a start-up. This is a cheap form of finance and it is readily available. Often the decision to start a business is prompted by a change in the personal circumstances of the entrepreneur e.g. redundancy or an inheritance. Investing personal savings maximises the control the entrepreneur keeps over the business. It is also a strong signal of commitment to outside investors or providers of finance .

Borrowing from friends and family:This is also common. Friends and family who are supportive of the business idea provide money either directly to the entrepreneur or into the business. This can be quicker and cheaper to arrange (certainly compared with a standard bank loan) and the interest and repayment terms may be more flexible than a bank loan. However, borrowing in this way can add to the stress faced by an entrepreneur, particularly if the business gets into difficulties.

Credit cards:This is a surprisingly popular way of financing a start-up. In fact, the use of credit cards is the most common source of finance amongst small businesses. It works like this. Each month, the entrepreneur pays for various business-related expenses on a credit card. 15 days later the credit card statement is sent in the post and the balance is paid by the business within the credit-free period. The effect is that the business gets access to a free credit period of aroudn30-45 days!

Demand Based on an estimate of 10,000 households consuming an average of 2 loaves per Week there is a potential demand for 20,000 loaves per week in the Region. The local bakeries and the imports do not satisfy the demand for bread and pastry. Consequently there are advantages to investing in this area including: Satisfactory returns on the investment if the operation is managed at a high Level of efficiency. Increase of output does not necessarily require additional labour. Capital costs are recoverable within the first 5 years of operation. Cheap electrical power supply. Any new operation entering this industry for the first time will have to produce at the Highest level of efficiency. The product must be excellent in quality and marketed Aggressively, with close attention paid to packaging and distribution. The operation May eventually offer a diversified product mix of bread, cakes, sweetbreads, pastries Etc

Market Potential The market potential of any operation such as a small bakery will depend on classic Plant location and sizing decisions with demand influenced by issues like proximity to The consumption centre. There may be competition from other existing bakeries. However an operation that is well organized and efficiently run with a distinct quality Product can achieve comparatively high returns from this investment, as there should

be no difficulty in disposing of bakery products. Market Strategy Several strategies will need to be implemented to establish a credible presence in the market for any new outfit. These may include: Distributing one-third of the products by selling at the bakery. Selling one-third to private distributors at wholesale prices. Selling one-third to supermarket outlets and to shops at wholesale prices. Specialty items like cakes and pastries may be sold to schools, canteens and snackettes at wholesale prices or at the bakery at retail prices. PRODUCTION PROCESS AND TECHNOLOGY In recent decades bread-making technology has gone way past the firewood outfits that were commonplace even in the 1960s. Improved mechanical designs, new materials and computer controlled systems have revolutionized the industry. There is a wide variety of production equipment and machinery available.

However, at the most basic level of production, the process is as follows: Weighing and combining ingredients in a dough mixer, Shaping the mixed dough manually or with a dough moulder, Allowing fermentation for approx 1 hours, Cutting the dough and reshaping into required sizes for baking, Baking the dough, usually at 180C (350 F). Equipment Dough Mixers These are used to combine the ingredients and come in a variety of sizes. The most Commonly used mixer that is conveniently sized for a small bakery is either a 30 quart (34litre) or 60 quart (68litre) model. These sizes are able to mix 1 or 2 bags of flour at Each mixing.

Dough Moulders After the mixing of ingredients, a dough moulder may be used to shape the dough before It is allowed to ferment. Shaping contributes to smooth texture in the final product. This Equipment may be considered optional as the process may be done manually, but it is Imperative if one is to compete with the products from the more established bakeries. Dough Dividers In larger bakeries where high output production is necessary, dividers cut the dough into Uniform sizes after moulding. In the process the dough is also homogenized and Degassed. The equipment is entirely optional as the cutting process can be done Manually with a dough knife but the degassing benefit is lost. Ovens Ovens are one of two main types, direct fired and indirect fired. In direct fired ovens the Heat is inserted directly into the baking chamber, resulting in more uniform baking Temperatures and more accurate heat control. In indirect fired ovens, fuel is burned in an External combustion chamber and the heat is circulated around the baking chamber by a blower system. These ovens are 20% more expensive in fuel consumption and consequently not as cost effective for small operations. Ovens can be either the traditional deck type or of rotating design. A rotating oven with up to 4 times the capacity of the conventional deck ovens plus a better finish (color and texture) is the better option. These ovens are typically available in sizes from 16 to 48 pans. A 24-pan unit is adequate for an operation producing 2,000 to 3,000 loaves per week. The usual energy sources for modern bakery operation are either electricity or propane gas. Potential investors should note that use of combustible wood and charcoal is not recommended though present in large reserves, since those options cannot match the consistency of modern computer-driven operations. At any rate, the easy availability of

cheap electricity in Linden will offer distinct advantages to using electrical ovens here. Good used equipment is available through Internet suppliers and also from within the Caribbean region REQUIREMENTS FOR BAKERY SETUP Some of the critical factors to be taken into account prior to establishing a bakery are: 1. Location It is critical to identify a building in an area that is clean and environmentally friendly. Once sales are going to be conducted at the bakery outlet as suggested above, it is necessary to ensure that all forms of traffic, pedestrian and mechanical, can come and go unencumbered. There are several suitable areas in the Region and specifically in Linden, particularly in the densely populated areas like Amelias Ward, Wismar Hill, One Mile, Half Mile, Wisroc or Blue Berry Hill. It will be important to carry out detailed surveys in order to determine demand and preferences in given locales as well as to ascertain the level and effectiveness of competition. Rental costs can vary from as low as $20,000 per month to $50,000 depending on location and the nature of the negotiations. Alternatively it may be possible to buy out some location. Property values and prices are significantly lower than in Georgetown and other urban centres on the coast. 2. Building The actual building housing the bakery operations should be adequate for proper layout of equipment and furnishings (ovens, tables etc) as well as providing space for storage of supplies and finished products. A small operation will require between 230sq.m. 465sq.m. (2,500sq.ft. - 5,000sq.ft.) 3. Electrical Supply The building should be wired (or rewired) for the type of equipment used, to avoid electrical overloads and risk of electrical fire. Certified electrical contractors should be employed to inspect, determine and where required install appropriate supply wiring

based on the needs of the operation and the location. Fortunately Linden has a surfeit of qualified, skilled personnel who are available as private contractors for just such activities. 4. Ventilation The location will need to be properly ventilated to avoid the buildup of heat during baking operations. Fans (cooling and extractor) should be installed to ensure adequate air circulation within the work area. 5. Furnishings Furnishings will include heavy-duty working / mixing tables. At least two 1.8m (6ft.) tables will be required for a small operation. Though stainless steel tables are more professional, wooden tables are as effective and will be cheaper to acquire. Fridge/freezer facilities will be needed to store ingredients, products stocks and raw dough, to prevent spoilage. 6. Equipment This will include sets of heavy-duty hand tools like rolling pins, metal scrapers, bowl scrapers, spatulas, dough knives, baking tins, racks for cooling and scale(s) for weighing ingredients. 7. Food Handlers Permits The operation of the bakery will require clearance from the Municipal Public Health Department and food handler permits for anyone involved in the production, sale or distribution activities of the business. At any rate the Municipalitys Regional Health Officers (RHOs) will periodically visit the operations to enforce health standards for operations and personnel. 8. Waste Management Proper facilities will be required for garbage and effluent disposal.

ANNUAL FINANCIAL PROJECTIONS Output: 700 loaves / day: 3,500 loaves / week Selling price: $150 per loaf retail Workweek: 5 days (unskilled labour typically works 12 hr/day, 6-day weeks) Work year: 52 weeks Assuming a potential market of 20,000 loaves per week in Region 10 alone, at a typical User rate of 2 loaves per week, this production level will address less than 10% of the Existing market. Investment $ 9,000,000 Year 1 Revenues $27,300,000 Expenditure $19,000,270 Net Margin $ 8,299,730 Break- even point Break- even point Break- even point Period 1 Months Percentage Sales 14.43% $ 3,289,157 26,269 loaves

Break- even point Production

The major capital and operational items associated with this level of operations Are: Investment Items Land and building Plant and machinery 3,000,000 5,250,000 750,000

Working capital for 2 months

Total capital investment Receipts per annum

9,000,000

27,300,000 17,600,270

Cost of production per annum Annual Fixed costs Profit per annum Break Even point

1,400,000 7,298,000 14.43% 30.40% 1.7months

Net Margin as a percentage Break Even point in months Machinery & Equipment Rotating Oven 24-pan 1-Bag Dough Mixer Dough Breaker Working Tables (2 or 3) Fridge/Freezer (11cu. ft.) Cash register or Point Of Sale Computer Bread Moulder (Optional) Delivery Van (second hand) Scales Bread Slicer Labour Manager (Owner/Manager) 1 Master baker 1 Asst Baker 4 Utility workers

3 Sales and distribution workers Operational items

Bread pans (approx 150) Cooling racks Hand tools and utensils: knives, bowls etc. Plastic bags and labels Production Items Flour Sugar Lard Salt Dry Yeast Other ingredients Other Considerations Rent Water supply Electricity Transportation Insurance Licenses and permits

FINANCING SOURCES The following are some of the funding sources from which a borrower may access financing for an operation of this nature, either singly or in combination. The Linden Economic Advancement Fund (LEAF) provides financing for Region 10 projects. Small Business Development Trust

 Institute of Private Enterprise Development National Bank of Industry and Commerce Citizens Bank

Detailed Analysis

Fixed Costs Variable Costs

Production costs: Direct materials $79.44 Direct labor $16.42 Indirect production costs electricity, fuel $350,000 $0.38 Other expenses: Sales and Advertising expenses etc $240,000 $0.25 Insurance of Equipment, Workers $120,000 Rent or Lease of land $30,000 General expenses: Office salaries $600,000 Supplies $40,000 $0.22 Miscellaneous $20,000 Totals $1,400,000 $96.70

Sales and Income data: Selling price per unit $150.00 Expected unit sales 182,000 Target operating income for the period 5,000,000 Cost of Production per annum Variable & Total 17,600,270 19,000,270

Results. Contribution margin per unit $53.30 Unit sales at break-even point 26,269 Dollar sales at break-even point $3,940,316 Dollar sales at expected level $27,300,000 Net Annual Profit at expected level $8,299,730

Unit sales at target operating income 120,086 Dollar sales at target operating income $18,012,873 Break Even Percentage 14.43 Net Annual Margin at expected level as a Percentage 30.40 Break Even Period in months 1.7

5. Balance sheet of company

Liability
PROPRIETOR'S FUND A/C SECURED LOANS LIC LOAN CENTUIRIAN BANK UCO BANK UNSECURD LOANS SUNDRY CREDITORS BIMAL SHAH ASSOCIATES DHARMESH SHAH KASMIRA DHARMESH SHAH TOTAL

2009-10 8813500 62180 70338 1223667 1186199 1980527 10714 14999 8100 5254055 2009-10 186375 209393 20996 397173 2460952 6831 2150335 5254055

2010-11 9570747 62180 33278 1194128 622554 1618118 16325 14999 17600 5558686 2010-11 147336 194769 9698 324703 2134207 3175 2273684 5558686

Asset
FIXED ASSETS INVESTMENT CASH &BANK BALANCE DEPOSITS SUNDRY DEBTORS PRE PAID INSURENCE PERMIUM CLOSING STOCK

Total

6. Projected balance sheet

Liability
PROPRIETOR'S FUND A/C SECURED LOANS LIC LOAN CENTUIRIAN BANK UCO BANK UNSECURD LOANS SUNDRY CREDITORS BIMAL SHAH ASSOCIATES DHARMESH SHAH KASMIRA DHARMESH SHAH TOTAL

2011-12 1033640

2012-13 1116331

2013-14 1205637

55962 17637 1158304 323728 1310675 24814 14699 38192 5836620

50365 19400 1123555 168338 1061647 37717 11024 82876 6128451

45329 10670 1089848 87536 859934 57330 10473 51678 6434873

Asset
FIXED ASSETS INVESTMENT CASH &BANK BALANCE DEPOSITS SUNDRY DEBTORS PRE PAID INSURENCE PERMIUM CLOSING STOCK

2011-12 178276 181135 14062 263009 1835418 1460 2160000 5836620

2012-13 196103 190191 20390 213037 1578459 2117 2311200 6128451

2013-14 166688 176878 29565 172560 1357475 2434 2426760 6434873

Total