INNOVATION LAB II

Integrated B-Plan
on

In partial fulfillment of the requirement for the degree of

Masters of Business Administration in Innovation and

Entrepreneurship 2020-2022

Submitted By: Aditi Singh & Kaustuv Ghosh

PRN No. – 20020143001, 20020143028

Submitted To: Dr. C.P. Gupta / Prof. Ritesh Khatwani

 Table of Contents
Introduction to the Business/Start-up......................................................................................................................2
Goals and Objectives................................................................................................................................................3
Value Proposition.....................................................................................................................................................3
Implementation Plan................................................................................................................................................4
Prototype................................................................................................................................................................. 5
Marketing and Sales Strategies................................................................................................................................7
Market Demand...................................................................................................................................................7
Operational Strategies.............................................................................................................................................8
Competitive priorities:..........................................................................................................................................8
Operational Decisions:.........................................................................................................................................8
Customer Acquisition Plan.......................................................................................................................................9
Financial Statements (Proposed)............................................................................................................................10
Cashflow Statements..........................................................................................................................................10
Profit & Loss.......................................................................................................................................................11
Revenue Projections...........................................................................................................................................11
Expenses.............................................................................................................................................................12
 Introduction to the Business/Start-up
ZERO, is changing the face of FMCG product consumption, packaging and delivery. By challenging
the traditional methods followed by FMCG giants and how they sell their brands that is both wasteful
and expensive, we are proposing a solution that promotes conscious consumerism while bringing
high quality products that are ethically sourced from villages of Jharkhand at inexpensive rates. By
providing them with a new platform to sell their products we aim to boost the village economy while
keeping plastic packaging consumption low.

We deliver home care products to your doorstep in our mini truck fitted with tanks that refill your
empty used-bottles with our products directly. FMCG industry is the biggest contributor to the
packaging waste generated, and through this model we aim to cut the use of plastic packaging. We
can lose up to 3Kgs of waste per household per month by running Zero in a milk run model in Urban
localities with high population density in the cities of India where the consumption of these products
is high.

The problem that ZERO is trying to solve -

1. Packaging waste has increased in India substantially. Over the last year there has been a
47% rise in single-use plastic in the metro cities in India. FMCG sector is the highest
contributor.
2. More than 91% of the plastic is not recycled and ends up in landfills or oceans.
3. Home care products are consumed in urban households by consumers who are price-
sensitive but the traditional channels of FMCG giants forces consumer to buy their
products at a higher rate (marketing and distribution spends)

Our target market is the Urban household in Metro cities where we have bifurcated our customers
into two segments.

The upper middle class is more tech savvy and less price sensitive; we believe that the highlighting
factors like Ethical sourcing, plastic-free buying and the qualities of the product and advantages over
the FMCG competitor brands would be the key selling point for ZERO.

The middle class is less tech savvy and more price sensitive and the trigger for them is going to be
the huge difference in cost from all the FMCG competitors that we have due to the savings on
packaging, marketing and distribution.
 By providing relevant motivators for the consumers, we could imbibe a behavioural change in their
consumption patterns and help build more sustainable practices for the future.

Goals and Objectives

● Goal 1 - Increase Local production
● Objective 1 - To use push marketing tactics, so that Zero products can be consumed
widely, than other expensive products available in the market
● Goal 2 - Promote No packaging
● Objective 2 - By cutting down packaging we lose up to 3Kgs of waste per household
per month.
● Goal 3 - Increase Market Awareness
● Objective 3 - Implement on-site marketing tactics to acquire a minimum 5% more
customers, bi-monthly by the end of the financial year.

Value Proposition

We are establishing a D2C model for consumption of FMCG products by eliminating all middle men
and plastic packaging.

Our target market is the Urban household in Metro cities where we have bifurcated our customers into
two segments.

The upper middle class is more tech savvy and less price sensitive; we

believe that the highlighting factors like Ethical sourcing, plastic-free

buying and the qualities of the product and advantages
over the FMCG competitor brands would be the key
selling point for ZERO.

The middle class is less tech savvy and more price

sensitive and the trigger for them is going to be the huge
difference in cost from all the FMCG competitors that we
have due to the savings on packaging, marketing and
distribution.

By providing relevant motivators for the consumers, we could

imbibe a behavioral change in their consumption patterns and help build more sustainable practices
for the future.

Implementation Plan
ZERO aims to help build sustainable practices for the people of India. This will be accomplished in
2phases in order to build two sustainable practices, that of Upcycling and Recycling. The first phase
of ZERO is highlighted below in the implementation plan.
● People - Venture partners (3), Drivers (2), Employee (1)
● Process - Milk run model, Website, Mobile version development, D2C Marketing
● Technology - Truck (Using Sensors and internet of things (IoT) technology to deliver
product ‘by the gram’ to customers’ doorsteps while maintaining hygiene, on a mini truck
with Refill Tanks), Website & Mobile version Development.
● Partners - Villagers of Chilgo, Web Developer (Contract basis)
● Resources/Materials - Tata Ace (2), Customized tank (Capacity 800L *2), Office/Warehouse
Space (2000 sq. ft)
● Marketing & Sales - D2C marketing, Digital Marketing, Word of mouth
 ● Expansion - Category expansion (agricultural, personal care,etc.), B2B (schools, offices,
institutions, malls), Aluminium Containers, introduction of kiosk model to service large
apartment societies.

The Second phase of ZERO, once we have done market testing and built a strong understanding of
the distribution, would include the introduction of end point waste collection system, to enable
consumer to build on the habit of disposing waste more consciously, directing waste to recycling
with us. This will be offered in a similar model for consumers through a gamified application which
will enable them to be rewarded for their contribution.

Prototype
Model of the Truck
 Marketing and Sales Strategies
Market Demand:

Total available market (TAM) - Total Population of Rajarhat, Kolkata – 188713

Serviceable available market (SAM) - Total Number of households in Rajarhat – 42657

Serviceable obtainable market (SOM) - (Upper Middle-Class and Middle-Class Families; 20% of
total Population of Rajarhat (New Town) in the first year)- 8531

Upper middle class of Rajarhat, New Town Kolkata in West Bengal, which is the 4th largest
contributor of plastic waste. The Milk Run model is used where there the population density is high.
Because Rajarhat is an urban area with a lot of large apartment societies it is the ideal place to start
our venture.

Our target market is the Urban household in Metro cities where we have bifurcated our customers
into two segments. The upper middle class is more tech savvy and less price sensitive; we believe
that the highlighting factors like Ethical sourcing, plastic-free buying and the qualities of the
product and advantages over the FMCG competitor brands would be the key selling point for ZERO.
The middle class is less tech savvy and more price sensitive and the trigger for them is going to be
the huge difference in cost from all the FMCG competitors that we have due to the savings on
packaging, marketing and distribution. By providing relevant motivators for the consumers, we could
imbibe a behavioural change in their consumption patterns and help build more sustainable practices
for the future.

Market Analysis of Rajarhat

1. D2C marketing (Pamphlets and posters)

2. Sample marketing with an emphasis on price point difference from Branded products.
3. Word of Mouth through Enablers like Household help
4. Location-based Digital Marketing
 Operational Strategies
The operations strategy for the company can be segregated into competitive priorities like: Time,
cost, quality and flexibility, in decision areas such as: Location decisions, capacity, supply network,
process technology, development and organization. The Milk Run model is used where there the
population density is high.

Competitive priorities:

Our target market is the Urban household in Metro cities where we have bifurcated our customers
into two segments.

The upper middle class is more tech savvy and less price sensitive; we believe that the highlighting
factors like Ethical sourcing, plastic-free buying and the qualities of the product and advantages over
the FMCG competitor brands would be the key selling point for ZERO.

The middle class is less tech savvy and more price sensitive and the trigger for them is going to be
the huge difference in cost from all the FMCG competitors that we have due to the savings on
packaging, marketing and distribution.

By providing relevant motivators for the consumers, we could imbibe a behavioural change in their
consumption patterns and help build more sustainable practices for the future.

Operational Decisions:

a) Low Marketing Spends – Traditionally FMCG companies have huge marketing spends wince
the product differentiation is low and the market is highly price sensitive. Building credibility
for the brand and ensuring high market penetration through strong distribution channels helps
brands earn more, but this requires huge marketing spends. At Zero, we aim to indulge in
direct marketing at customer’s doorstep. By giving customers trial packs, explaining the
perks of using our product, its journey and how we help them make sustainable choices only
at serviceable areas we would be avoiding huge ATL branding and advertising costs. Since
we will be only operating in certain areas, we would be making sure that our marketing
materials are distributed exclusively to the potential target consumers.
b) Distribution – To pick clustered areas with the target customers for distribution of the
products by Zero. For expansion, new trucks with new serviceable areas would have to be
deployed. Furthermore, scaling up would include setting up kiosks in apartment societies
which would be then serviced by trucks that would refill these tanks.
c) Location Decision – The Locations are to be picked based on a couple of factors. The first
being the proximity from the location where the materials are being sourced from. The
second requirement is that of a metropolitan city where we can find clusters of urban housing
arrangements with large apartment societies. The third requirement is of cities with high
waste
 production but less waste management solutions who can relate to the waste issue. Based on
these three factors we have chosen Rajarhat area of Kolkata in West Bengal, which is close to
our source in Jharkhand, it is an urban area with our target market and West Bengal is the
fourth largest contributor to the waste problem in the country.
d) Process Technology – Zero Truck (Using Sensors and internet of things (IoT) technology to
deliver product ‘by the gram’ to customers’ doorsteps while maintaining hygiene, on a mini
truck with Refill Tanks), Website & Mobile version Development.
e) Milk-Run Model – requires the inflow of multiple orders for a particular area in the day to be
serviced to lower the expense of logistics. To ensure the milk run model works it is critical to
make sure that the number of trips are low and the sale size per trip is high.

Customer Acquisition Plan

We intend to acquire customers through direct marketing only in the serviceable areas. This way our
marketing costs are only a part of the operational cost
when we service a certain society. We plan on
growing at a 20% rate per year under phase one of
ZERO. The Second phase of ZERO, once we have
done market testing and built a strong understanding
of the distribution, would include the introduction of
end point waste collection system, to enable
consumer to build on the habit of disposing waste
more consciously, directing waste to recycling with
us. This will be offered in a similar model for consumers Customer Acquisition Growth

through a gamified application which will enable them to be rewarded for their contribution.
 Financial Statements (Proposed)
Cashflow Statements

Particulars / Years 1.00 2.00 3.00 4.00 5.00

Op Cash & Cash Equivalents - 14,22,105.62 23,82,042.79 28,03,064.15 42,05,697.89

Cash Flow from Operating
Activities

Net Earnings 7,14,409.40 4,26,584.37 8,17,434.30 11,74,445.09 16,90,233.54

Add - Non Cash / Non Op
Expenses 3,83,583.69 2,74,808.22 3,94,829.48 5,68,229.23

Depreciation & Amortisation 1,01,388.60 91,249.74 1,28,669.07 1,15,802.16 1,06,221.94

Interest on Loans - - - - -

Net Cash From Operations 8,15,798.00 9,01,417.80 12,20,911.58 16,85,076.74 23,64,684.71

- - - - -
Less - Increase in Receivables 21,032.88 2,103.29 5,398.44 7,480.69 10,542.38
- - - - -
Less - Increase in OCA Excl Cash 1,273.50 127.35 140.09 154.09 169.50
- - -
Less - Taxes Paid - - 3,83,583.69 2,74,808.22 3,94,829.48
Cash Flow from Operating
Activities 7,93,491.62 8,99,187.16 8,31,789.37 14,02,633.73 19,59,143.35
Cash Flow from Investing
Activities
- - -
Purchase of Fixed Assets 9,38,886.00 - 4,65,443.00 - 20,000.00

Closing WDV 67500 60750 54675 - -

Cash Flow from Financing
Activities

Promoter / Partner Capital 15,00,000.00

OD Taken
Repayment of Loan
Cash Flow from Financing
Activities 15,00,000.00 - - - -
Cash Flows Generated during the
year 14,22,105.62 9,59,937.16 4,21,021.37 14,02,633.73 19,39,143.35

Cl. Cash & Cash Equivalents 14,22,105.62 23,82,042.79 28,03,064.15 42,05,697.89 61,44,841.23
-
Free Cash Flows to Firm 1,45,394.38 8,99,187.16 3,66,346.37 14,02,633.73 19,39,143.35
Profit & Loss

Profit & Loss Statement 1.13 1.14 1.42 1.78 2.29

Particulars / Years 1.00 2.00 3.00 4.00 5.00

Total Revenues 15,35,400.00 16,88,940.00 20,83,026.00 26,29,116.60 33,98,710.26

Less - Operating Expenses 7,19,602.00 7,87,522.20 8,62,114.42 9,44,039.86 10,34,025.55

Operating Profits 8,15,798.00 9,01,417.80 12,20,911.58 16,85,076.74 23,64,684.71

Less - Depreciation &
Amortization 1,01,388.60 91,249.74 1,28,669.07 1,15,802.16 1,06,221.94

Net Profit Before Interest & Tax 7,14,409.40 8,10,168.06 10,92,242.51 15,69,274.58 22,58,462.77
Less - Interest on Loan / OD

Profit Before Tax 7,14,409.40 8,10,168.06 10,92,242.51 15,69,274.58 22,58,462.77

Provision for Tax @ 25.16% 3,83,583.69 2,74,808.22 3,94,829.48 5,68,229.23

Profit After Tax 7,14,409.40 4,26,584.37 8,17,434.30 11,74,445.09 16,90,233.54

Revenue Projections

Particulars / Years 1 2 3 4 5
Revenue Streams
A) Sale of Handwash (500ml)
Online + Ecom Sales Qty 20472 22519 33779 50668 76002
Selling Price 25 25 25 25 25

Revenues (A) 5,11,800.00 5,62,980.00 8,44,470.00 12,66,705.00 19,00,057.50

B) Sale of Dishwash (500ml)
Online + Ecom Sales Qty 20472 22519 24771 27248 29973
Selling Price 25 25 25 25 25

Revenues (B) 5,11,800.00 5,62,980.00 6,19,278.00 6,81,205.80 7,49,326.38

C) Sale of Floor Cleaner (500ml)
Online + Ecom Sales Qty 20472 22519 24771 27248 29973
Selling Price 25 25 25 25 25

Revenues (C) 5,11,800.00 5,62,980.00 6,19,278.00 6,81,205.80 7,49,326.38

C) Sale of Toilet Cleaner
(500ml)
Online + Ecom Sales Qty 20472 22519 24771 27248 29973
Selling Price 25 25 25 25 25

Revenues (C) 5,11,800.00 5,62,980.00 6,19,278.00 6,81,205.80 7,49,326.38

C) Sale of Liquid Detergent
(500ml)
Online + Ecom Sales Qty 20472 22519 24771 27248 29973
Selling Price 25 25 25 25 25

Revenues (C) 5,11,800.00 5,62,980.00 6,19,278.00 6,81,205.80 7,49,326.38

Total Revenues ₹ 15,35,400 ₹ 16,88,940 ₹ 20,83,026 ₹ 26,29,117 ₹ 33,98,710

Expenses

Particulars / Years 1 2 3 4 5
A) Marketing &
Promotions 75000 82500 90750 99825 109808

Subtotal (A) 75,000.00 82,500.00 90,750.00 99,825.00 1,09,807.50

B) IT Costs & Web Site
Costs
Website - Development
& Updation 1,400.00 1,400.00 1,400.00 1,400.00 1,400.00
Domain, Hosting &
Server Charges 15,000.00 16,500.00 18,150.00 19,965.00 21,961.50

Subtotal (B) 16,400.00 17,900.00 19,550.00 21,365.00 23,361.50

C) Salaries

Driver 2,40,000.00 2,64,000.00 2,90,400.00 3,19,440.00 3,51,384.00

Employees 2,40,000.00 2,64,000.00 2,90,400.00 3,19,440.00 3,51,384.00

Subtotal (C) 4,80,000.00 5,28,000.00 5,80,800.00 6,38,880.00 7,02,768.00

D) Overheads
Petrol Cost- Milkrun
(30KM) (30 times in one
year) 7,641.00 8,405.10 9,245.61 10,170.17 11,187.19
Logistics of Chilgo to
Kolkata (307KM) (4000L
every 5 times a year) (Rs.
30/KM) 44,761.00 49,237.10 54,160.81 59,576.89 65,534.58
Maintenance Cost of
Vehicles 8,800.00 9,680.00 10,648.00 11,712.80 12,884.08

Conveyance & Travel 48,000.00 50,400.00 52,920.00 55,566.00 58,344.30

Electricity and
maintenance cost of
Office Space 24,000.00 26,400.00 29,040.00 31,944.00 35,138.40

Miscellaneous 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00

1,48,202.00 1,59,122.20 1,71,014.42 1,83,969.86 1,98,088.55

Total Costs 7,19,602.00 7,87,522.20 8,62,114.42 9,44,039.86 10,34,025.55