ASSIGNMENT OF PROJECT

APPRAISAL

PREPARED BY:
 SRINIBAS ROUTRAY
ROLL NO-257

SUBMMITED TO:
PROF. UMA GUPTA
FACULTY {FINANCE}
AFFINITY BUSINESS SCHOOL
 EXECUTIVE SUMMARY
The great State “organic cafe” is a hypothetical start-
up. It is set up by two highly enthusiastic young
entrepreneurs who found opportunity that no
existence of organic cafe in present market of
Bhubaneswar.
Organic Food consumption has become the trend of the
time but still is many who do not have a clear idea
regarding the definition of organic food. Organic foods
are natural and pure and since they are free from any
sort of contamination, they definitely are more
appropriate for consumption.
Our cafe decided to focus on both veg. & non-veg. items i.e. soups,
sandwich, juice, salads etc. We aspire to become market leader in
Orissa market within the next 5 years. After stabilizing our brand we
will expand our business in other regions of Orissa.

MISSION AND VISION STATEMENT

Mission:
Provide healthy food to all and stop degradation of environment.

Vision:
To become market leader and open franchises in and around
Orissa

PROJECT HIGHLIGHTS
Name of Business:
The Great State “Organic Cafe”
Nature of Business:
Service unit (student run cafe).

Nature of Product:
Healthy, natural and organic food.

Place of Business:
CRPF Square
BBSR, Orissa.

Cost of project:
Rs.17,00,000

Loan required:
Rs.8,50,000

Debt Equity ratio:

1:1

Return on Investment:
214.11%

Number of partners:
2

Market:
Focusing on people going to the gym, professionals, students,
foreigners and who want to be fit.

Turnover:
Rs.1,08,00,000
Break-even point:
45.97%

PREFEASIBILITY AND FEASIBILITY STUDY

• Procurement of raw material
FRUITS

VEGETABLES
 OTHER ITEMS

• TECHNICAL FEASIBILITY

List of machinery and cost

 PERSONNEL PLAN
NAME OF DEPARTMENT SALARY (RS.)

FINANCE & MAINTENANCE MANAGER 12000

MARKETING CUM GENERAL MANAGER 17000

2 Chefs(2) 8000 (EACH)

1 Cleaner(1) 2000 (EACH)

3 Waiters(3) 3000 (EACH)

Location
Importance in Bhubaneswar
Opening an organic food cafe in Bhubaneswar we found it to be
important, as there are not many cafes that provide healthy food.
As BBSR is the capital of Orissa, it is developing rapidly and going
to be a metro city. It’s middle and upper middle class is also
growing rapidly. Though it the temple city many visitors are
coming to this place. It has been observed that most people are
health conscious and opt for a healthy life.

• Economic viability:
Here there is less huddles from point of view of
government i.e. Govt. policies, rules & regulations.
Our project is economically viable.
• Commercial feasibility:
MARKETING STRATEGY
Price: We will be serving products of a better quality
and taste at a price affordable by all classes of
people.
Product: Our product includes different types of
snacks which will have an exceptional taste and
quality compared to our competitors.
Place: CRPF Square, Bhubaneswar, Orissa
It is a developing area with many upcoming sites also
CRPF square itself has many food joints, shopping
destination etc which proves to be the perfect place
to open an organic cafe like ours.
Promotion: Our main strategy will be to advertise
near colleges, gyms, high street etc. We will start our
 advertising about month before the launch of our
cafes so that people and potential customers already
know about it.
Advertise in the gym by setting contract with them.
Advertising in the malls itself by bill boards,
promoting sales by keeping discounts for students as
well as gym members with whom we have tie-up also
by advertising on the local radio channels.
Sponsoring health event by supporting charity. Also
“word of mouth” which is the most important
source of marketing by maintaining a good image of
the cafe by providing good customer service.
• Financial feasibility: {Presumptions}
1) Margin money is 50% and bank loan is 50 %

2) Rate of Interest is 13.5% on bank loan

3) Depreciation rate is 20% on all assets

4) Working days in a month ( 30 days approx)

5) Income tax 30%

6) All figures can be rounded to the nearest rupee

Statement of fixed assets

Statement of working capital (1 month)

Cost of Project
 Fixed Cost + working Capital (2 months) = Cost of project

 Rs.750000/- + Rs.896000 = Rs.1646000/-

 Therefore Cost of project = Rs.1646000/-

 Sources of Finance

 Partners Contribution 50% = Rs.850000/-

 Bank loan 50% = Rs.850000/-

 Income Statement

 Sales Revenue
Per day sales:
Approx 600 people visit E-square per day, from them 400
People is women and 200 are others including children,
men, Aged.
Therefore on an average 150 visit our café.i.e. 150
(number of customers visiting per day) x 200(Average
Amount spent by each customer) = Rs.30000/- per day
sales
Annual sales:
Rs.900000/- x 12 months= Rs.10800000/-
 Expenses:
{Calculation done on working capital items for 12
months}
 Profit:

 Balance Sheet:

Break Even Analysis:

Break-Even Analysis
1. Revenue/per unit Rs.200
2. Variable Cost/per unit Rs.160
3. Contribution/per unit Rs.40
4. Fixed cost Rs.9, 00,000
Break-Even Volume = (Rs.9, 00,000/Rs.40) =22,500
units.
Break-Even sales would be 41.67% of total capacity.
FORMULA:
B.E.P = F.C/CONTRIBUTION PER UNIT.
CONTRIBUTION= REVENUE PER UNIT-VARIABLE COST

Detail Project Report

{DPR}
1. Promoters:
Srinibas Routray & Deepak Kumar Bal
2. Name of the company:
The Great State “Organic Café”
3. Detail qualification of promoters:

 Srinibas Routray
Age-23
Qual- PGDM

 Deepak Ku. BAL

Age-23
Qual- PGDM
4.Location of the project:
CRPF Square, BBSR, Orissa.
It is developing area with many shopping destination.
5. Product of the company:
 SOUPS

 SALADS

 JUICES

 SANDWICHES

5.Raw Material Details:

Vegetables will come from east-coast part of ORISSA (DHOIA) and from tribal
farmers which are cultivated without pesticides.
6.Machineries:
 Kitchen utensils

 Air conditioner

 Computer

 freeze

8. Market analysis:
Our emphasis points are marketing will be to sell
organic food, how our product is healthy and to
acknowledge people that how healthy and fresh it is.
Budget for marketing section is to create hype about
our product before its launch and to attract health
conscious people as well as food eaters (consumers)
SWOT ANALYSIS
Strength:
1. Organic food is richer in Vitamins, Minerals, and
Fiber and retains the level of nutrients for much longer.
2. You will have more energy through consuming low
levels of toxics and chemicals that show your body
down.
Weakness:
1. People are unaware about organic food.
2. There is a rigid mentality of people to adopt to the
change in their lifestyle.
Opportunity:
1. Food habits are changing.
2. Standard of living is improving.
Threats:
1. Cost: Since it is little more expensive than the other
food items people may look back.
2. Established Competitors: Competitors like Pizza Hut,
Hot Spot, Dawat, Green Chilly etc are creating a threat
for Organics.

Market Segmentation
The Lonely Rich:
Most of the professional are tech worker these days and most
of those tech workers are executives and Internet workers.
They hang out with each other but desperately want to get
away from it and use the money they are making. Because this
wealth has come fairly easily for them, it’s particularly east to
separate them from their money again. They spend the most
on drinks, appetizers and tips.
Young Happy Couples:
The restaurant will have an atmosphere that encourages
people to bring dates and to have couples arrive. It won’t be
awkward for others an Organic does want to be a social place
here people meet other and develop a network. These young
couples are generally very successful but blamed and won’t be
pending as much on drink.

The Rich Hippies:

The Visitors in BBSR are a massive group with tremendous
influence over city’s government and private enterprise. They
basically want to enjoy their lives and can afford a high price
for their psychological satisfaction.
 Dieting Women:
The organic food menu will always have a line of extremely
delicious very low fat meals. Organics will have tables of
women meeting to discuss all types of matters while feeling
good about the food they eat.

Supply analysis
Being the first ones to start an organic food cafe, we
stand as the pioneers for building up the organic food
market. Our competitors would be the local food joints
serving food different from us regarding the crabs,
vitamins, proteins, minerals etc. Organic food is healthier
compared to these joints as it is more calorie and health
conscious food cafe.
Target Market (Customers)
Organics believes that the market can be segmented
into four distinct groups that it aims to target:
· Professional people

· Young happy couples

· Visitors

.Dieting women
 APPLYING PORTER’S 5 FORCES
MODEL

 INTENSITY OF RIVARLY: HIGH

 BARGAIN POWER OF SUPPLIER: HIGH

 BARGAIN POWER OF BUYER: HIGH

 POTENTIAL ENTRANTS: HIGH

 THREATS OF SUBSITUTES: HIGH

9. CORPORATE SOCIAL RESPONSIBILITY:

We will provide healthy food by which physical hazards
will be diminished. We will try to create a healthy
society.

10. CONTIGENCY PLAN:

1) We are adopting tight cost-controlling
methods.
2) We have insured our business.
 3) We are always keeping sufficient money for
our working capital.
4) If required we can invite two more partners to
our business in future.

CONCLUSION

After identifying the business opportunity and

making a detailed project report on the
business opportunity, we have come to the
conclusion that the opportunity will have a
better prospect on the years to come. As the
people all over the world are realizing the bad
side effects of fast food, drinks and harmful
drugs used in modern therapies they will switch
over to nature cure. The search for
alternative for these things will end to our
organic food cafe.