Income and expenses statement

Expenses Amount
Raw material (paper)
[5 tones – 65000 per ton]
Polypropylene cover
Boxes
Power
Salary
Transport expenses
Rent Rs.3,25,000
Rs.9,000
Rs.15,000
Rs.10,000
Rs. 24,000
Rs.15,000
Rs.3,000
Total Rs. 4,01,600
Income Amount
Income by sales(11,70,000*0.48)
[0.64 average of all ml cups] Rs.5,61,000
Net profit Rs.1,59,400
Projected Financial plan :
Fixed cost Amount
Machine ( paper cup making)
Cutting machine
Vat
Wiring & installation Rs.10,00,000
Rs.3,50,000
Rs.32,000
Rs.18,000
Total Rs.14,00,000

Requirements in detail:
Raw material – paper ( size nearly 85 to 95cms length and 120 to 150 cms ) differs
according to paper cup size.
Cost of paper cup making machine – china made 5.5 lakhs to 8 lakhs.
- India made 6.5 to 10 lakhs.
 Cost of cutting machine – 3.5 lakhs.
Stock of paper for 1 month = 4-5 tons for single machine
Production per day = nearly 45000 cups ( approximately ) * for 24 hours
Cost of raw material Rs. 65000 per ton
Other raw material required – packaging box ( 1 box can contain 5000 to 10000 cups
)
plastic cover to pack 25 or 50 or 100 cups.
Packing material
Tool to work the machine while it was in repair.
Workers – 2 men ( for day and night shifts ) 1 men to maintain production and for
packing and delivery.
2 womens to check the leakage of cups and to pack or to to tore cutted paper and
give for Machine.
Cost of cups according to size:
size Cost( paise)
100 ml 0.32
120 ml 0.35
150 ml 0.48
210 ml 0.70
250 ml 0.80
330 ml 1.2
Unit of production per ton:
size cups
100 ml 1,50,000
120 ml 1,50,000
150 ml 1,35,000
210 ml 1,15,000
250 ml 95,000
330 ml 85,000
Cost of production:
Raw materials Rs. 3, 25,000
Packing material Rs. 24,000
Salary Rs. 24,000
Electricity Rs. 10, 000
Transport Rs. 15, 000
Rent Rs. 3,000
Area :
The equipment requires space about 450 square feet in addition it requires store
room for inventory storage and finished goods.
Power:
The power needed for each day is around 80 units.for two months it takes 4100 un
its ,each unit costs around 2.40 rs and around it costs rs.10,000 per month.
Boxes:
In each box 600 paper cups can be arranged. A box costs Rs.50. 300 boxes will be
requires for a month (300*50) costs Rs.15,000.
Polypropylene cover:
One polypropylene bag can have 100 cups thus 18,000 bags is required. A cover co
sts Rs 0.50 , for 18,000 it costs Rs.9000.
Salary:
Machine operator (3 persons* 6000) – Rs. 18000
Packing section (2*3000) – Rs.6000
In total Rs.24, 000 will be spent for salary.
Transport expenses:
The transportation costs for each box costs around Rs.50 thus for 300 boxes it c
osts around Rs.15,000.

Break even analysis :

Product description:
Nowadays there is a compulsion made for everybody that they contribute their par
t for the reduction of global warming. The paper cups nowadays replacing the pla
stics. Also the usage of paper cups are increasing nowadays. This creates a huge
demand for the paper cups.
The size of the cups :100 ml , 120 ml , 150 ml , 210 ml , 250 ml , 330 ml.
Market description:
Karur has a huge potential for paper cups. Karur has the population of 2,00,000
,and mobile population is around two lakhs. In that on an average the customers
for tea shops and bakeries is around 1,50,000 people in total. The growing numbe
r of bakeries and hotels proves to have a great demand for our business.
Pricing strategy:
We implement penetration pricing. On a bulk purchase
Cost of cups according to size:
100 ml – Rs.0.36
120 ml – Rs.0.40
150 ml – Rs.0.53
210 ml – Rs.0.75
250 ml – Rs.0.85
330 ml – Rs.1.25
This will attract the customers and retain them. In forth coming years the deman
d for paper cups will be more and this demand will reflect in our prices in futu
re.

Growth strategy:
Requirement of paper cups become more because of the actions taken to eradicate
plastics.
Also being an eco-friendly product it seems to be more attractive.
We position our product to be more eco-friendly.
The government actions against plastics usage will also play an important role.
Hotels, Tea shops , Bakeries , and Ice cream parlors seems to be the main targe
t customers. Thus the modification of these cups and new designs and models will
attract the customers.
Also in future not only in cups also the other usage of papers will make the bus
iness to grow healthy. We plan to have direct association with the companies whi
ch needs our products.
Marketing:
We make a direct contact for the tea shops, and bakeries and hotels. We also mar
ket through local channels. We also collect the used cups and we send it for rec
ycling in some shops.
TARGET CUSTOMERS
Human resource plan:
There are five workers; it includes three men and two women. Two men ( for day
and night shifts ) 1 men to maintain production and for packing and delivery. Tw
o women to check the leakage of cups and to pack or to tore cutted paper and giv
e for Machine.
Partners (two) persons jointly together doing business activities.
Socio impact of the plan:
Since the product is eco-friendly, we contribute our part to the society
Exit strategy:
In the promotional context we are implementing new strategy for retain the marke
t through the new product introducing