SUBMITTED BY:
Umesh Kr Gupta Vijeta Bharti Vinod Yadav Vishal kr. Singh Vivek Ranajan Vikash Kr Singh Vivekanand Rai (G.L.)
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ACKNOWLEDGEMENT
We take immense pleasure in thanking Resp. Shweta Ma¶am for having permitted us to carry out this new business plan. We wish to express our deep sense of gratitude to our internal integration of our group members for Internal Guide, for able guidance and useful suggestions,
which helped us in completing the business plan, in time. Needless to mention that Resp. Shweta Ma¶am, who had been a source of inspiration and for her timely guidance in the conduct of our business plan.
Words are inadequate in offering our thanks to all the useful resources from which we have been acrossed, and the encouragement and cooperation in carrying out the business plan.
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Contents
Executive Summary............................................................................................................................................ 4 Business Description .......................................................................................................................................... 6 Industry overview- ......................................................................................................................................... 6 Company Description- .................................................................................................................................... 6 History and current status- ............................................................................................................................. 6 Goals and objectives- ..................................................................................................................................... 7 Critical success factors- .................................................................................................................................. 7 Company ownership- ..................................................................................................................................... 7 Exit strategy- .................................................................................................................................................. 7 Products / Services- ........................................................................................................................................... 8 UNIQUE FEATURES ......................................................................................................................................... 9 RESEARCH AND DEVELOPMENT ..................................................................................................................... 9 PRODUCTION ................................................................................................................................................. 9 Industry & Market Analysis .............................................................................................................................. 10 Soft drinks Industry overview ....................................................................................................................... 14 Competitor s analysis ................................................................................................................................... 15 Marketing Strategies and Sales ........................................................................................................................ 18 Market Segmentation, Targeting & Positioning strategy................................................................................... 20 Targeting...................................................................................................................................................... 21 Positioning ................................................................................................................................................... 21 Product/Service Strategy.................................................................................................................................. 22 Pricing Strategy.......................................................................................................................................... 23 Distribution Channel ................................................................................................................................. 23 Promotional Strategy ....................................................................................................................................... 25 Sales Strategy and sales forecast ........................................................................................................ 27 Development Strategy ..................................................................................................................................... 28 Management- .................................................................................................................................................. 29 Operation Strategy........................................................................................................................................... 30 Inventory ..................................................................................................................................................... 33 Production ................................................................................................................................................... 34 SOURCES OF FUND OR FINANCE....................................................................................................................... 35 Start-up ........................................................................................................................................................ 36 Page 3 of 38
Executive Summary Chill-out beverage is an click and mortar type of business having a vast selection of liquor, spirits ,wine, and fine cigars , cold drinks as well as a wide assortment of rare and hard to find liquor and smoking accessories. As people use to spend a huge amount of money on liquor, they will be ready to spend even more if they get it at the place and time they want. Hence we¶ll charge a bit more as delivery charge like 10% on the purchase of less than 1000, 8% on the purchase of 1000-1500, on the order of 1500-2000 we¶ll charge 5%, and on the order of 2000-2500 the charge will be 3% of the order and the order of more than 2500 we¶ll provide free delivery. We will carry-on our business in Delhi and New Delhi region. We¶ll provide within Half an hour of the order, and we¶ll also contact to various guest houses and event Management companies and will have contract to purchase our products. Our business will be Click and Mortar hence we¶ll take order online and on phone, Apart from this we¶ll contact various companies who wish to advertise their product online once our store will start running at a good pace. The initial investment will be from the partners (Group Members) on equal proportion and the profit also will be distributed accordingly. The Beverages Industry is as on boom and the youth of today don¶t have time to visit personally at shops but however they manage but when they¶ll get the online purchasing facility they¶ll take advantage
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of that and the use of internet is also becoming popular day by day hence this is golden opportunity for Chill Out Beverages. As in the market there no other existing player Chill out Beverage Store found that the opportunity is more than risk as it is click and mortar. Rs. 2crore is contributed by the seven partner equally. Some of our friend is going to invest in our business. So we will raise Rs 3crore through personal finance.
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Business Description
Industry overview- On a nationwide basis, there are more than
5,000 stores that specialize in the sale of liquor, wine, beer, and other spirits to the general public. On an annual basis, these businesses aggregate generate more than $50 billion of revenue and employ more than 200,000 people. This is a mature industry and the future expected growth rate of the business is expected to mirror that of the general economy.
Company Description- Chill-Out Beverage Store is a new business
and is unique of its type in Delhi. The company is owned by Mr. Vivekanand Rai and He is Director of the company. Chill-Out Beverage Store is in business of Wines, Beers and other beverage products online. Chill-Out Beverage Store deliver the products to the consumer within half an hour of the order.
History and current status- The current economy has remained
difficult over the past few years. However, Liquor Stores and drinking establishments tend to fair well during difficult economic climates. As such, the Liquor Store will be able to remain profitable and cash flow positive in any economic climate. On a nationwide basis, there are more than 5,000 stores that specialize in the sale of liquor, wine, beer, and other spirits to the general public. On an annual basis, these businesses aggregate generate more than $50 billion of revenue and employ more than 200,000 people. This is a mature industry and the
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future expected growth rate of the business is expected to mirror that of the general economy.
Goals and objectives- We at Chill-Out Beverage Store have made it
our mission to supply the highest quality craft beer and Beverages etc. to the widest possible audience. To that end, we have compiled the largest and most varied selection of beers in the world. In both our Traditional and online store, you can select from more than 80 distinct styles of beer crafted by the finest breweries around the globe. We have a selection of
thousands of beers from every state in the Union and every continent on the map. We take pride in providing each of our customers with their own unique beer experience. Cheers!
Critical success factors- Critical success factor of Chill-Out Beverage
Store is the delivery time which is just Half an Hour of order in all over Delhi and New Delhi region and the time management and punctuality of our delivery time. The variety at Chill-Out Beverage Store also adds to the success of the company.
Company ownership- Chill-Out Beverage Store is owned by Mr.
Vivekanand Rai.
Exit strategy- As we at Chill-Out Beverage Store are confident
enough that we¶ll not only be able to survive in the market but also will be doing a good business and hence we don¶t have any exit strategy as such.
SOFT DRINKS Barq¶s Root Beer Mountain Dew Diet Coke Diet Pesi Sunkist Pepsi Big Red Sierra-Mist Red Mountain Dew
Champagne (and other sparkling wines) Fortified Wine Brandy (and Cognac) Rum Tequila / Mescal Vodka Whiskey / Whisky (including Scotch,
Coke
2.
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Gin Aquavit Pulque Grappa Schnapps Absinthe
UNIQUE FEATURES
Delivery on time is our unique feature. We can deliver our producte in 30 minutes in anywhere in Delhi and we can assure our customers for good quality products
RESEARCH AND DEVELOPMENT
WE do not manufacture products therefore R&D Is not very important .but we are trying to improve our logistic and supply chain management that we became able to reduce our cost and offer products at lower cost.
PRODUCTION
Production is not applicable in our business. We outsource products we do not manufacture products.
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CHILL-OUT BEVERAGE
Industry & Market Analysis
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* Indian Made Foreign Liquor (IMFL) Alcoholic beverage industry is a well developed - Rs 8,200 crores (US $ 1907 million) industry in India Major players in the alcoholic beverages market - United Breweries (UB) Group (Bangalore), Shaw Wallace (Calcutta), Jagajit Industries (Kapurthala, Punjab), Pradesh), Associated Breweries
Mohan Meakins (Solan, Himachal
& Distilleries (Mumbai). Per capita beer consumption in India is 0.5 litres; as against 20 litres in China, 100 litres each in USA & Germany, annually.
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BEER: MARKET
y y y y y
A 70 million cases market Market growing at 10-12 % per annum South and west zones account for bulk (> 75 %) of this market Major beer consuming centers - Maharashtra (Mumbai) Karnataka (Bangalore); Tamilnadu (Chennai) Minimum economic size : 5000 kilo litres; 15000 kilo liters for NRI proposals
y
y y y
Around 40 units in organized sector, mostly regional players 4 large breweries have 84% of the market Major beer brands (manufacturers) - King Fisher, Kalyani Black Label (UB Group), Golden Eagle (Mohan Meakins), Haywards (Associated Breweries and
(Shaw Wallace), London Pilsner Distilleries)
y y
Foreign brands - Stroh¶s, Fosters Beer packed in 650,750 & 1000 ml glass bottles; usage of (330 ml) cans minimal
y y
Preference in the Indian market for strong beer Promotions and sponsorships (sports, promote brands musical events) to
y y y y
States¶ prohibition policies govern trade sales for beer Multi layer trade channel structure Beer sold through the same outlets as IMFL Institutional sales of beer to star hotels, large restaurants, bars/ pubs
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y
Import duty on beer - 100 % basic; 10 % surcharge; SAD : 4 %
Market : 58 million cases Past growth 15 % CAGR per annum Brown spirits - particularly whisky, rum & brandy account for over 75 % of this market
y y
South and North share 60% of market Industry in the organized sector - an industrial license is required to start manufacture
y
Major brands (manufacturers) : Signature, Blue Riband (UB Group), Aristocrat (Jagajit Industries), Smirnoff, Gilbeys Green Label, Malibu, Archer¶s Peach Schnapps(International Distilleries India), Passport (Seagram¶s), VAT 69, Black & White, Black Dog (United Distillers India)
y y
Preference for brown spirits (molasses flavor) in Indian market Liquor packed in 180, 375, 500, 750 and 1000 ML bottles - glass and plastic bottles. 180 ML and 750 ML are fast moving
y
Promotions, sponsorships, surrogate advertising (sometimes) done to build brands
Government Controlled : Tamilnadu, Karnataka, Delhi, Kerala Prohibition States : Gujarat, Manipur, Mizoram, Nagaland There are over 22000 liquor retail outlets spread across the country
y
Sales tax (ad valorem), Bottling Fee, Liter Fee, Vend Fee, Gallon age Fee, Privilege Fee, Import/ export Pass duty etc. are some of them. In Karnataka some of the taxes levied are : Excise Duty : Liquor from spirits - Rs. 45/- bulk liter; Premium Malt Whisky Rs. 60/- bulk/ liter; Liter Fee - Rs. 20/- bulk liter; Sales tax : 60%; cess 5%
y
Import duty on whisky, rum, gin & vodka, liqueur - 230 % + SAD : 4 %
Soft drinks Industry overview
Global sales of soft drinks exceed 327 billion liters and are valued at more than US $393 billion annually. North America, Europe and Japan are the most mature markets for global soft drinks. Coco Cola and PepsiCo Inc has significant control over the global soft drinks market and both have similar business organizations and processes
worldwide. Soft drink consumption has a market share of 46.8% within the non-alcoholic drink industry; clearly, the soft drink industry is lucrative with a potential for high profits. Coca-Cola is king of the soft drink-empire and boasts a global market share of around 50%, followed by PepsiCo at about 21%, and Cadbury Schweppes at 7%.´ Aside from these major players, smaller companies such as Cott Corporation and National Beverage Company make up the remaining market share.
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The carbonates category was valued at INR 79,360.7m ($1,923.1m) in 2008, representing a CAGR of 1.1% since 2003. By the end of 2013, the carbonates category will be worth INR 85,212.2m
($2,064.9m), with an expected CAGR of 1.4% between 2008 and 2013. The ease of entry and exit does not cause competitive pressure on the major soft drink companies. It would be very difficult for a new company to enter this industry because they would not be able to compete with the established brand names, distribution channels, and high capital investment. Likewise, leaving this industry would be difficult with the significant loss of money from the fixed costs, binding contracts with distribution channels, and advertisements used to create the strong brand images.
Competitor s analysis
SUBHASH LIQUORS PVT LTD Products/Services : Highland Prince, XXX Fighter Rum, Party Vodka, Alcohol Beverages, Green Berry, Alcohol Beverages Alcohol
Asianlak Health Foods Ltd. Products/Services: Fruit Drinks, Carbonated Soft Drinks, Bottled Water.
Vipul Kumar Trading Co Engaged in supplying and exporting drinks such as soft drinks, nutritious soft drinks, flavored soft drinks, tasty fruit juice and health fruit drinks.
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Technometalics Farma Deals in exporting and manufacturing of alcoholic beverages such as aromatic alcoholic beverages, wines, aloe Vera drinks, aloe Vera health drinks, aloe Vera refreshing health drinks and red wines. These are few of the companies in India that offer the alcoholic and soft drinks beverages in the market but one thing that we have advantages over these companies is that all these companies have specialized in one type of beverages whether it is alcoholic or non alcoholic beverages. And we are providing both of these together so there will be a great potential for our company to get a bigger slice of cake in this competitive market. The major triggers of e-commerce in India were:
Saves time and efforts Convenience of shopping at home Wide variety / range of products are available Good discounts / lower prices Get detailed information of the product You can compare various models / brands
And some of the major barriers at present were:
Not sure of product quality Cannot bargain/Negotiate Not sure of security of transactions / Credit card misuse Need to touch and feel the product Significant discounts are not there Have to wait for delivery
So by utilizing the triggers of e-commerce and reducing the barriers of e-commerce we can run our business successfully. Before starting
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our business we are working on those barriers so that it will become easy for we people to carry on our business. Since we are delivering the branded products so it already eliminates the barriers related to product quality. Secondly we start with aim to get the faith of people on our business so at first we try to cover a small area by which people have not wait too much for their orders. And there is also no need to touch and feel the beverages products like clothes, cars, electronics items etc.
Marketing Strategies and Sales
Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage where Competitive advantage is the strategic advantage one business entity has over its rival entities within its competitive industry. Achieving competitive advantage strengthens and positions a business better within the business environment. Marketing strategy involves careful scanning of the internal and external environments. Internal
environmental factors include the marketing mix, plus performance analysis and strategic constraints. External environmental factors include customer analysis, competitor analysis, target market
analysis, as well as evaluation of any elements of the technological, economic, cultural or political/legal environment likely to impact success.
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Once a thorough environmental scan is complete, a strategic plan can be constructed to identify business alternatives, establish challenging goals, determine the optimal marketing mix to attain these goals, and detail implementation. A final step in developing a marketing strategy is to create a plan to monitor progress and a set of contingencies if problems arise in the implementation of the plan.
Strategies based on market dominance - In this scheme, firms are classified based on their market share or dominance of an industry. Typically there are four types of market dominance strategies: 1. Leader²through chill out beverages have the great opportunity to be the market leader as non of its competitors have this great mix of product which we provided i.e. it¶s all one stop solution for beverages. 2. Challenger²chill out beverages does not follow that strategy as we want to be best in our field since we not only look for B2B business but also the B2C business i.e. with home delivery facility even if the minimal order quantity is demanded from the customers. So we give challenge to other to follow the challenger strategies. 3. Follower²NA 4. Niches as our business is basically focus on small area at its very early stage. So chill out beverages focus on particular segment of customers besides the B2B customers.
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Porter generic strategies - strategy have the dimensions of strategic scope and strategic strength. Strategic scope refers to the market penetration while strategic strength refers to the firm¶s sustainable competitive advantage. 1. Product differentiation²it¶s quite difficult to have a product differentiation strategy for our company as we are not manufacturing the beverages. 2. Cost leadership²this could be our edge over other business as we are not going to have any intermediaries for our B2B and B2C customers. And we directly procuring the beverages from manufacturer and supplying to our
customers. So we can surpass more margins to our B2B customers and profits to our B2C customer with ease of shopping and ordering facility from their home and own working places. 3. Value creation²first thing concerns with the value in the mind of customers is price. So we gives more margin to our customers it leads to value creation. Besides that facility for the ease of ordering, payment, delivery time, and home delivery is all helpful for our business to create value for our customers.
Market Segmentation, Targeting & Positioning strategy Market segmentation is the division of a market into different groups of customers with distinctly similar needs and product/service requirements. Or to put it another way, market segmentation is the division of a mass market into identi¿able and distinct groups or
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segments, each of which have common characteristics and needs and display similar responses to marketing actions. The purpose of market segmentation is to leverage scarce resources; in other words, to ensure that the elements of the marketing mix, price, distribution, products and promotion, are designed to meet particular needs of different customer groups.
Targeting
What is target? This is the real goal/objective in market that marketer want to reach. What percent of the population uses the product at all? What percent uses your brand? How does that compare to competing brands? What is the demographic profile of the product category? Which media reach the users of this category?
Positioning
Positioning is an essential component -- and skill - in good marketing. Perceptual maps are used to determine the position of a product, firm, person, service or idea. Positioning maps or perceptual maps can be simple, yet very effective marketing tools. It¶s all about getting a favorable image in the mind of customer compare to the nearest competing product. As we have already mentioned previously the consumption pattern of beverages of the Indian consumers. So briefly we have a look on the customers of our business.
Alcoholic Beverages 20-35 yrs working class 35-50 yrs class people
Soft Drinks All age group people consume soft drink beverages. So targeting at the family of middle class and above
Product/Service Strategy As it was already mentioned the product and services which chill out beverages offers to the customers. In the near future we are concentrating basically on these two types of beverages. However our company also plans to extend their product line by including other
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beverages of alcoholic and non- alcoholic. Mainly plans to introduce the fruit, milk, coffee, tea and other herbal juices. This is our long term strategy in order to me the biggest market player with huge presence physically as well as most recognized online player in that industry. A list of our product and services is mentioned in this plan.
Pricing Strategy Since its nothing like charging a skimming price in this industry as people are well aware of the prices of soft drinks but not very much of alcoholic beverages. Since we are offering these products to our customer without any intermediaries so it¶s a great edge for our business to provide the products at their own place at the same market price and we also make good money by that i.e. the margin we give to the other intermediaries. We can also provide the products at lower price than market for few products. One thing is that for B2B customers we work like that but for B2C customer mainly are of upper class which urge for the home delivery. So they are also ready to give the extra charge for that as they are basically business class people with very busy time schedule, so it is not easy for them to go market and purchase these all things.
Distribution Channel From the figure given below clearly shows how we are going to distribute our products to our customers. We are in direct contact
with the beverages manufacturer for supply of their products. Since
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we are more concentrating towards our B2C customers so we apply the rule of attack from both and try to get more in touch with the customer. As a customer can directly purchase the products by making their order online directly to chill out beverages without any difficulty. We have our employees for home delivery of ordered products throughout the possible regions. We have also four
warehouses to cater the bigger picture of the market with quick supply to their final destinations. Since our SCM and e-SCM both are so strong which provide the extreme support for the exchange of goods and services with information.
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Flow of goods and services
Beverages Manufacturer
Chill out Beverages
Promotional Strategy As the Indian market is well accepted the beverages whether it is alcoholic and non alcoholic. People are well aware of the different brands available in the market. So it is not necessary to go with the heavy promotion of the products and services that we offer. Basically promotion is all about to inform, persuade, remind and reinforcing the customer to purchase our product.
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They different ways of promotional strategy is Advertising²in that case we have to only advertise our website so that more and more people access to our website. Besides a part of Google Ad words we are also advertise our products and websites on the social networking sites this gives us the huge reorganization among our targeted customers. Other facility is above the line and below the line promotion which is done by the manufacturer. So there is advantage because we have not to spend too much for that. Sales promotion we offer the customers these beverages products at very beneficial and competitive price so that they go for our business again and again. We have these sales promotions for both of our B2B and B2C customers. Personal selling this promotion strategy is mainly focus on the B2B customers of our business so that we get regular business from them.
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Sales Strategy and sales forecast
³Success never comes easily´ in any business as e-business growing at much better pace so we can hope for better sales in our business as the consumers of the alcoholic and non alcoholic beverages are growing. We are aiming at an average of one crore sales per month and huge amount of this comes from our B2B customers nearly 70-80% of our business. For better sales strategy we need a quality sales force so we recruit quality sales person for accomplishment of that task which contact with the B2B customers for the institutional sales. We provide them the facility of transportation and develop the customer
relationship management to ease the businesses with our customer.
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Development Strategy Cost Leadership: Cost leadership is the strategy that focus on making the organization Chill-Out Beverage Store more competitive our product and more cheaply than competitors can. The logic behind this strategy is that by providing product more cheaply than competitors, we offer the product to customers at lower price than competitors and there by hope to increase market share. Differentiation Strategy: Successful differentiation allows the business to charge premium price to the customers, leading to average profit. Focus: It is the strategy that emphasis our organization Chill-Out Beverage Store more competitive by targeting a specific market, product line or buyers group. We can use low cost approach, but only for a narrow target market. The logic behind of this approach is that our organization Chill-Out Beverage Store that limit our attention to one entire market. Development Timeline To achieve the breakeven point in 6 months. To become the market leader in 3 years. Delight each and every customer. Diversify the business in other cities. Development Expenses Depends on future growth and development.
Management structure and style: Formal and structured Ownership: The initial investment will be from the partners (Group Members) on equal proportion and the profit also will be distributed accordingly. For this particular project, there is a
group of 7 people. Everyone equally participates in this project. We are student of IPM, Meerut (Institute of Productivity & Management), and this projected is started by us, every person is equally responsible for the decision made in the organization and liable for any wrongdoing. Board of advisors or Directors: Umesh Kumar Gupta and Vivekanand Rai.
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Operation Strategy Operations strategy is the collective concrete actions chosen, mandated, or stimulated by corporate strategy. It is, of course, implemented within the operations function. This operations strategy binds the various operations decisions and actions into a cohesive consistent response to competitive forces by linking firm policies, programs, systems, and actions into a systematic response to the competitive priorities chosen and communicated by the corporate or business strategy. In simpler terms, the operations strategy specifies how the firm will employ its operations capabilities to support the business strategy. At head office we have one person who maintains the order details from the website and verify the nearby address and payment details. We are using the software to maintaining the detail, and as the address mentioned by the consumer it would directly go to the nearby warehouse. It is very important for our organization to maintain the supply chain and value chain by providing the services on time. In order to maintain the inventory we have one store keeper in the ware house that maintains the record of inventory and places the order accordingly to the suppliers. He checks the consignments which has arrived from the suppliers or distributers and maintain the record and deliver to the head office, if there is any damage or problem he reports this directly to the head office, at the same point in time it is his task to keep the record of total product which has been delivered
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to the consumer after verifying the address and payment detains from the head office. We have three employee at each ware house who delivered the product at home, employees are provided with the motorbike for the convenience and the fast delivery. Service is available 24X7. LOCATION Location is critical to provide the product on time or within the time in order to generate planned sales volumes. The business is highly territorial. We have mapped the location of every retail liquor store in New Delhi, and we have been working with executives of UB Group, to determine the best possible location for the warehouse. Four target areas were identified: the newly developing West Delhi, South Delhi, East Delhi & North Delhi. Among these target areas, South Delhi has been identified as our most promising business opportunity. We would take a small room on rent rather than going for a big warehouse, that room is equipped with all different verity of wine in fridge, with ice cubes. SUPPLIERS Radico Khaitan Limited Mathura Road Plot No. J-1, Block B-1, Mohan Co-op Industrial Area, Mathura Road, New Dekhi, Delhi. Ph. No.-01126975334
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Jagatjit Industries Limited Nehru Place 91, 4th Floor, Bhandari House, Nehru Place - Delhi Ph No.: 01126432641
Ram Hiya Wine and Beer Shop Karol Bagh 2228-28, Haridhian Singh Road, Karol Bagh Delhi Ph No.- 01128750271
Melco Wines Pvt. Ltd. Connaught Place 2nd Floor, Plaza Cinema Building Connaught Place, Delhi Ph. No.-01123317897
Shaw Wallace and Company Limited K.G. Marg 806, Ansal Bhavan, 16, K G Marg Delhi Ph. No.- 01123714216
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Inventory
We manage a variety of complex liquor accounts, each with its own particular needs. Our Warehouse Management System (WMS) allows us to manage spirits inventory by SKU number and FIFO requirements while providing CBP with the information they require. We have various tools to handle products with utmost care and our wireless inventory control system provides us with on demand accurate information. Your Inventory information, including arriving products, items on hand, orders in process as well as previously shipped goods along with the corresponding POD¶s are available 24 hours a day. We count our beginning inventory. This includes all bottles and kegs in storage, as well as damaged bottles. Enter this data into a spreadsheet. The spreadsheet should include each bottle's price and compute total inventory value. We compare sales to inventory. At the end of the inventory period (generally one month), count the beverage inventory. Enter this data into the inventory spreadsheet. Calculate the difference between the previous night's inventory and the morning inventory. Divide this number by your liquor sales to determine your beverage cost. We review the beverage store room logs against our invoice records for the inventory period. The beginning inventory plus bottles purchased less bottles transferred to the consumer should match our ending inventory. Breakage may affect this total slightly, so we
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instruct staff to maintain a list of broken bottles and provide the broken bottle top as evidence.
Production
As an online liquor seller we do not have any production activity. We are not producing liquor, we are in direct contact with the suppliers and distributers in New Delhi. We check the inventory regularly and update the inventory information every day, in case of excessive demand sometime because of the festival season or marriage season, we increase the no. of temporary employee.
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SOURCES OF FUND OR FINANCE Since our business Chill-out beverage is an click and mortar type of business having a vast selection of liquor, spirits ,wine, and fine cigars , cold drinks as well as a wide assortment of rare and hard to find liquor and smoking accessories, Which need a huge amount of investment. There are several sources of fund through which we can raise fund. Our budget for starting new online business is RS 5crore. There are several sources through which we can raise money. Following are the sources through which we are going to raise fund:1)Personal Sources:- A large number of start-ups are 'self funded' i.e.
Rs. 2crore is contributed by the six partner equally. Some of our friend is going to invest in our business. So we will raise Rs 3crore through personal finance. Bank is the most common source of funding in the form of loans, overdrafts, and other types of finance. For arranging the remaining funds of Rs. 2crore, we are going to take loan and also get tie-up with bank of Baroda. We have preferred to this bank because of their low interest rate.
2) Banks and Finance Companies-
Following are our Projected Break Even Point (B.E.P) which we assume to achieve in three year.
Research & development Programming & Site Development Site Hosting ( For 1st year ) Launch Promotions Search Engine Registration A. Total Start-up Expenses Start-up Assets Cash Required Stocks Long-term Assets ( Computers (10)) B. Total Assets
2,80,000 50,000 5,000 100,000 10,000 7,40,000
14,00,000 83,00,000 3,00,000 100,00,000
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1st Year Expenses Wages & salaries Rent Utilities Insurance Taxes Telephone Internet charges Direct Expenses Sales and marketing Interest on Loan (@ 20 %) Licensing Charges Amount paid to Liquor dealers Amount paid to Beverage dealers Miscellaneous C. Total Expenses 24,00,000 96,00,000 15,00,000 2,50,000 5,00,000 40,000 1,70,000 1,00,000 3,00,000 40,00,000 10,00,000 150,00,000 50,00,000 4,00,000 40260000
Total Expenses
(A+B+C)
50, 00, 00,000
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We expect that in 1st year we will achieve 10crore sales and our 1st year estimated profit will be Rs 5crore. In the second year our expenses were same excluding the direct expenses, Salaries, amount paid to dealers are to be increase by 10% which are estimated to be Rs. 22,50,000 so our expenses for the 2nd year will be Rs 4,25,10,000. In second year, our expected profit will be 6crore. So in the middle of the 2nd year we will achieve the B.E.P. and after that we will start getting actual profit.