Welcome to Technopreneur

Introduction and marketing potential

The bakery products in the form of biscuits, cakes, buns, pastries are consumed in almost every middle class family home in our country. These products are classified as ready to eat category. The consumption pattern of these products is increasing due to increased per capita income of the family where the disposal income available increasing every day.

Basis and Presumptions

i) The basis for calculation of production capacity is taken on single shift basis.

ii) The salaries and wages, cost of raw materials, utilities etc. are based on the prevailing rates in north India. These cost factors are likely to vary with time and location.

iii) Interest on term loan and working capital loan has been taken at the rate of 12% on an average, prevailing. This rate may vary depending upon the policy of the Financial Institutions/Agencies from time to time.

iv) The cost of machinery and equipments refer to a particular make/model and the prices are approximate.

v) The break-even point percentage indicated is of full capacity utilization.

Implementation Schedule

The major activities in the implementation of the project has been listed and the average time for implementation of the project is estimated at 12 months:

Sl. No.	Name of Activity	Period in Months (Estimated)
1.	Preparation of project report	0.5
2	Registration and other formalities	1.0
3	Sanction of loan by financial institutions	2
4	Plant and Machinery: a) Placement of orders	0.5
	b) Procurement	1.0
	c) Power connection/ Electrification	1
	d) Installation/Erection of machinery/Test Equipment
5	Commercial Production	05

Notes

Many of the above activities shall be initiated concurrently.

Technical Aspects:

1. Cakes and pastries

Cakes and pastries are produced by preparing a batter of sugar, salt, baking powder, egg, flour, milk, flavour etc and mixed so that a homogenous mixture is obtained and the air bubbles are entrapped in the batter. The batter thus produced is then put inside the mould and the mould is inserted in the baking oven to produce cake. Different formulations for cake and pastries are made to get varied tastes and flavours.

2. Breads and buns

Dissolve yeast in water with complete addition of sugar. Stir the mixture till a homogenous solution is formed. The temperature of the mixture is kept 30 to 35 deg. C. Now salt is added in the mixture and it is stirred to obtain a homogeneous solution. Now flour and shortening is added to make a soft dough. The mixture is allowed to ferment for atleast one hour. The dough is now put in the moulds and passed through the baking oven in which the temperature is controlled to 250 deg. C. The baking time is kept for 20 minutes.

The hot bread is now cooled to 30 deg. C by passing it through cooling unit and then it packed and is ready for the market.

The process of making buns is almost same as making bread except that some additional ingredients are added.

Production Capacity

Quantity (per annum)	Value (Rs.)
Production
Motive Power	10 KVA.

Financial Aspects

• Land and building

The building is considered as rental with a rent of Rs. 5000 /month of covered area 200 sq. ft.

• Plant and equipment

Sl. No.	Description	Ind/Imp.	Qty.	Value (Rs.)
1	Mixing machine with ½ HP motor	Ind	1	25,000
2	Slicing m/c with ½ H.P.motor	Ind.	1	25,000
3	Bread and bun mould, mixing vessels, weighing balance and other tools	Ind.		1,00,000
4	Furniture and office equipments like computor, telephone communication equipment etc.			3,00,000
5	Material handling equipments			50,000
6	Misc. equipments			1,00,000
	Total			6,00,000
	Add, 10% of the total cost of machinery, equipments towards electrification charges			60,000
	Total			6,60,000
	Cost of office equipment/furniture
	(iii)Pre-operative Expenses			30,000
	Total Fixed Capital			6,90,000

B. Working Capital (per month)
(i) Staff and Labour

Sl. No.	Designation	No.	Salary (Rs.)	Total (Rs.)
(a) Staff
1	Manager	1	15,000	15,000
2	Skilled and semi skilled workers	8	4,000	32,000
	Total			47,000

(ii) Raw Material Requirement

Sl.No.	Particulars	Total Value of raw materials
1	Flour	)
2	Yeast	)
3	Flavours	)
4	Sugar	)
5	Misc. additives	)
6.	Eggs	)
Total (1) to (6)		1,00,000

(iii) Utilities	(Rs.)
Power	5,000
Water	100
Total	5,100

(iv) Other Contingent Expenses (per annum)

Sl. No.	Particulars	Value (Rs.)
1	Rent	5,000
2	Postage and Stationery	500
3	Consumable	2,000
4	Repairs and maintenance	2,000
5	Conveyance and transport	15,000
6	Advertisement and Publicity	25,000
7	Insurance	500
8	Miscellaneous expenses	5,000
	Total	55,000

( v) Total Recurring Expenditure (per month) = (i + ii + iii + iv)

Rs. 47,000 + Rs. 1,00,000 + Rs. 5,100 + Rs. 55,000 = Rs. 207100

C. Total Capital Investment

Fixed capital	Rs. 6,90,000
Working capital (for 01 months basis)	Rs. 2,07,100
Total	Rs. 8,97,100

Financial Analysis

(1) Cost of Production (per annum)		(Rs.)
i)	Working capital	24,85,200
ii)	Depreciation on Machinery and equipment @ 10%	36,000
iii)	Depreciation on office equipment/ furniture @ 20%	60,000
iv)	Interest on total capital Investment @ 12%	1,07,700
	Total	26,88,900

(2) Turnover (per annum)

Sl.No.	Item	Qty.	Rate (Rs.)	Total (Rs.)
	All bakery products	Lot	-	30,00,000

(3) Profit		Rs. 30,00,000 – Rs. 26,88,900

	=	Rs. 3,11,100

(4) Profit Ratio		311100 x 100 ---------------- 30,00,000

	=	10.37%

(5) Rate of Return	=	311100 x 100 --------------- 897100

	=	34.67%

(6) Break-even Point

Fixed Cost		(Rs.)
(i)	Annual Rent	60,000
(ii)	Depreciation	96,000
(iii)	Interest	1,07,700
(iv)	40% of salary and wages	2,25,600
(v)	40% of other contingent expenses and utilities (excluding rent)	2,40,000
	Total	7,28,700
	Say	7,29,000

B.E.P.		Fixed Cost ×100
	=	-----------------------
		Fixed Cost + Profit

	=	7,29,000 ---------------- 7,29,000 + 3,11,100

	=	70.1%