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THE LICKS

PROJECT FEASIBILITY REPORT


ON

(Coffee shop and catering services)

Submitted in partial fulfillment of the requirement for


the award of the degree of Bachelor of Business
Administration

BY

FANENDRA KUMAR SHARMA (BBA/3546/07)

UNDER THE GUIDANCE OF

“Mrs. Sraboni Dutta”

Birla institute of technology

(Deemed university)

Mesra, Ranchi (Kolkata-extension centre)


THE LICKS
CERTIFICATE

This is to certify that the project feasibility report


entitled
“THE LICKS” is being submitted by

SHUBHODEEP
BHATTACHARYA(BBA/3516/07)

In partial fulfillment of the requirements for the award


of the degree of Bachelor of Business Administration.

This study has been successfully completed under my


supervision and guidance.

MRS. SRABONI DUTTA

(Faculty Member)

DEPARTMENT OF MANAGEMENT, B.I.T. MESRA


(KOKATA EXTENSION CENTRE)
THE LICKS
CERTIFICATE OF APPROVAL

This is to certify that the project feasibility report


entitled
“ THE LICKS ” is being submitted by

SHUBHODEEP BHATTACHARYA(BBA/3546/07)

As partial fulfillment of the requirements for the


award of the degree of Bachelor of Business
Administration.

This project report has not been submitted to any


other University/Institute for the award of any degree.

(Internal Examiner) (External


Examiner)
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ACKNOWLEDGEMENT

It is indeed a moment of great pleasure and satisfaction to take this


opportunity to thank all people who have contributed in making our
project a rich experience.

I would like to profusely thank the coordinator Mr. R.T. Goswami and
all faculty member for providing the efficient contribution and
resources for completing the project.

I would like to extend my sincerest gratitude to our project guide, Mrs.


Sraboni Dutta, without her support and innovations; the successful
completion of the project would have not seen the glory.

Lastly, I want to thank to my parents, who are a constant source of my


inspiration for their continued support without which I would not have
been what I am today and also a round of applause to all the friends
who joined hands together to make this project a successful mission.

SHUBHODEEP BHATTACHARYA

(BBA/3516/08)
THE LICKS
CONTENTS

1. Profile Page

2. Executive Summary

1.1 Introduction

1.2 Objective

1.3 Mission

1.4 Key to Success

3. Company details

3.1 Company Location and Ownership

3.2 Start-up Summary

4. Services

4.1 Service Description

4.2 Competitive Comparison

5. Input and required Equipments

6. Marketing Summary
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6.1 Market survey

6.2 Market Characteristics

6.3 Pricing Strategy

6.4 Promotion Strategy

6.5 Sales Strategy

7. Management Summary or Human Resource plan

7.1 Organizational structure

7.2 Salary Structure

7.3 Requirements, Recruitment and Selection

7.4 Training and development

8. Financial Summary

8.1 Cast of the Project

8.2 Means of the finance

8.3 Trading and Profit & Loss A/c

8.4 Balance Sheet

8.5 Ratio Analysis

8.6 Break Even Analysis


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9. Risk Assessment

10. Conclusion

11. Bibliography

12. Annexure

PROFILE PAGE

This business plan is prepared by Mr. Shubhodeep


Bhattacharya, who is quite a motivated youth of this
country and want to start his own business. He wants
to be a self employed. He is quite aware of today’s
business scenario and has ample knowledge about
business and its management. He has quite an
innovative idea of opening a coffee shop and catering
service firm named “THE LICKS” which will deal with
THE LICKS
serving coffee to its various customers of different age
groups and provide catering services to the employees
of various organizations. The firm will take contracts
and order from various individuals and organizations to
build their requirement or utilize these services.
This company will be situated in NTPC Rihandnagar
township which is closer to Varanasi. This business will
be a sole-proprietorship business and Mr.Shubhodeep
Bhattacharya will be the owner of the business. All
expenses and incomes will be taken by the owner
himself. The owner is quite confident of his project and
its prospects.

INTRODUCTION

A coffeehouse or coffee shop is an establishment


which primarily serves prepared coffee or other hot
beverages. It shares some of the characteristics of a
bar, and some of the characteristics of a restaurant,
but it is different from a cafeteria. As the name
suggests, coffeehouses focus on providing coffee and
tea as well as light snacks. THE LICKS is a coffee shop
THE LICKS
which will provide with every means to provide
refreshments to its customers.
When a person comes to a coffee shop,he expects to
get quick services and refreshment with a peace of
mind.So our shop will see to ity that our customers are
served with full dedication and courtesy with due
respect to quality.
THE LICKS will be serving the people of NTPC
Rihandnagar (UP) in the coming year with every facility
available. It will to be a place where search for
relaxation, peace of mind and calmness will ultimately
come to an end.
The Licks company deals with serving coffee to its
customers and catering to NTPC employees. It is a
partnership business registered under the act of 1932;
this business will be sole-proprietorship business and
Mr.Shubhodeep Bhattacharya will be the owner of the
business. SWOT analysis of the project show the
project will have good future and it has much
opportunity with avoidable threats and limitations.
Company has targeted especially to average income
group of people to provide its various services.
Regarding the catering service company will charge
prices at a subsidised rate and employees will be
served by just a call from office. Company will use
different promotional techniques to promote it like
company will advertise in the newspaper, television
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and magazines. Regarding the company’s private
dealings or operational related activities company will
take the building on monthly rental basis which will
cost around 17000 per month and it will be easy for
the company.
Regarding the human resource the company will
employ 40 skilled and unskilled employees and
depending upon the company policy the number of
worker may be increased or decreased.
Regarding the entrepreneurial team this business will
be a sole-proprietorship business and Mr.Shubhodeep
Bhattacharya will be the owner of the business. All
expenses and incomes will be taken by the owner
himself.

OBJECTIVES AND SCOPE

1. To serve people with dedication and courtesy.


2. To provide Quality services with due respect to
time.
3. Providing easy access to the employees of the
organisation by providing “just call and get”
services.
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4. To Generate employment opportunities and
economic benefit to the society.
5. To maintain a healthy society and serve it better.

MISSION
THE LICKS is a business which deals with serving
coffee various age groups and catering to
organisation.Our main mission is to establish more and
more branches in many cities of our country.

KEY TO SUCCESS
• After creation providing various services;
• Marketing services to companies and individuals;
• Recruitment of skilled and equipped expertise;
• Dedication and hard work of the founders;
• Raising productivity and lowering overall costs.
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PROJECT AT A GLANCE

Proposed Activity : Coffee shop and catering


Services

Promoter and Address: Shubhodeep Bhattacharya


B-261,NH-3,NTPC Colony
Rihand nagar,UP-231223

Location of the Office: A-21, Mansarovar complex,


Near kalyan kendra,
Rihand Nagar,
THE LICKS
UP-231223

Telephone Number: (05446)244488,242579/80

Fax Number : (05446) 244230

Website : www.THE LICKS.com

Complain/Service Email: bshubhodeep@yahoo.com

START-UP SUMMARY

Start-up will require approximate a capital of 29,


00,000 of which Rs 19, 00,000 will be provided by the
founder and their families. The remaining Rs 10,
00,000 will come as a loan.

Particular Amount(R
s)
Rent 15,000
Stationery etc 2,000
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Brochures 4,000
Furniture 80,000
Licenses/ Legal 50,000
Vehicle(on lease) 5,40,000
Research and Development 9,000
Advertisement 50,000
Computer 1,00,000
Machinery and equipment 10,00,000
Insurance 20,000
Others 30,000
TOTAL START UP 19,00,000
EXPENSES
START-UP ASSETS
Cash Required 10,00,000
Other Current Assets Nil
Long term Assets Nil
TOTAL ASSETS 10,00,000
TOTAL REQUIREMENT
29,00,000

FUNDING
Fanendra kumar sharma 19,00,000
Other Nil
TOTAL INVESTMENT 19,00,000
CURRENT LIABILITIES

Account payable Nil


Current borrowing Nil
Other current liabilities 10,00,000
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Long term liabilities Nil
TOTAL LIABILITIES 10,00,000

TOTAL START UP EXPENSES 19,00,000


TOTAL START UP ASSETS 10,00,000
TOTAL START UP LIABILITIES 10,00,000
TOTAL REQUIREMENT 29,00,000

START-UP

SERVICE DESCRIPTION

THE LICKS is a coffee shop which serves coffee to the


customers of various age groups and caters to
NTPC(Rihand nagar) at the administrative building. A
employee can receive 24 hours canteen services on a
call. Customers will received standard services from
THE LICKS
us. We believe in quality of service that’s why we will
hire skilled cooks and our service men will be receive
specialised training.

COMPETITIVE COMPARISION

THE LICKS is not primarily focused on providing just


coffee as majority of its competitors. In the coffee
division we have many competitors and they provide
refreshment services but not services which we will
provide and it’s our competitive edge over others. It
has following comparative advantages:-

1. QUICK SERVICE
2. TRAINED EMPLOYEES
3. COST EFFECTIVENESS
4. USE OF BEST QUALITY OF FOOD MATERIALS USED
IN PREPARATION.
5. ACCESSIBLE BY ALL TYPES OF CUSTOMERS.

INPUTS AND REQUIREMENTS


THE LICKS
1.1 FURNITURE

1) Chairs
2) Tables
3) Shelves.
1.2 ELECTRIC APPLIANCES

1) Air conditioning
2) fans
3) Aqua guards
4) Personal computers.
5) Other Equipments Use In Construction
6) Electrician Equipments(boards,fittings,etc)

1.3 COMMUNICATIONS

1) Telephones
2) Fax machine
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1.4 SERVICES

1) Catering

1.5 MATERIALS

1) Various types of food materials


2) Painting equipment.
3) Decorative items.
4) Equipments used in creating an infrastructure.
5) Electrical appliances.

1.6 OTHER

1) Fire extinguishers
2) Human Resource
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MARKET SURVEY

I have done an innovative market survey of 100


persons of Rihand nagar. For the “ESTABLISHMENT OF
THE COFFEE SHOP AND SERVICES” .Survey is
entertained by 100 individuals which includes 30 high
level income people,40 middle and 30 lower level
income people. Out of the 30 high level income groups
are from executives of NTPC limited and rest 40 and
30 includes middle level employees,young adults and
people in surrounding villages. We have done a
successful and informative survey in which we get to
know that they would really encourage the
THE LICKS
establishment of a coffee shopand catering services
for the convenience of the employees in the township.
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MARKET CHARTERSTICS

TARGET CUSTOMER
The targeted customers are NTPC employees
categorised executives,officers, sr.managers and
customers of various age groups etc. Our target
markets are middle to upper class families, private and
public organizations.
THE LICKS

GEOGRAPHICAL AREA
It is situated in NTPC (Rihand nagar) township area
which is rich in its class.
COMPETITION & EXISTING MARKET
As the idea new of establishing coffee shop along with
the catering services,we will try to grasp the market on
the basis of our service and professionalism in our
approach.

PRICING STRATEGY

Our pricing will be depending on the type of


beverage,service and quality. Price of different
services is set in such a way that any body can afford
the services.

PROMOTION MIX

Following initial promotional activity through


advertisement in news papers, magazines, and on
THE LICKS
local Television and radio, THE LICKS will significantly
reduce its promotional effort in the hope that word-of-
mouth publicity will attract potential clients. THE LICKS
will also use the promotional technique by providing
various free of cost services.

SALES STRATEGY
Anticipation sales are shown in the accompanying
table and chart.

SALES FORECAST

PARTICULAR 2011(Rs) 2012(Rs) 2013(Rs)


Coffee service 30,000 40,000 60,000
Catering 75,000 85,000 1,20,000
services
Consultancy 13000 15000 18000
services(guard
)
TOTAL 1,18,000 1,40,000 1,98,000
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THE LICKS
FINANCIAL PLAN

Financial Analysis is one of the most important aspects


of any project. Rather it is the backbone of a project
and without continuous supply of funds, an
organization can’t prosper and of this very reason it is
bound to fail.

Financial management is an integral part of the


business administration and ranks equally in
importance with other key result areas such as
production and marketing. The fundamental objectives
of any venture are survival and growth, though it could
be other social objectives too. Financial management
plays a major role in fulfillment the above and includes
functions like analysis and forecasting needs.

Managing working capital, planning structure etc.


Financial analysis refers to the process of obtaining
relevant economic information about a project in order
to establish its financial viability.
THE LICKS
In order to develop adequate financial information this
strategy looks at the projected capital cost estimates
under including operating cost estimates and revenue
estimates. The information collected for this purpose is
printed in the form of Performa balance sheet, Profit &
loss statement and cash flow statement. Financial
analysis deals not only with the financial aspects of a
project but also with its operational aspects, whether
the project would enable to achieve the objective for
which it is undertaking.

The break even analysis is used to explain its


operational characteristics. There are various
techniques for analysis of financial statement in order
to reach conclusion about the financial health,
profitability and efficiency of an enterprise and also to
compare enterprise with other similar undertakings.

The techniques of ratio analysis are the most


important techniques of financial analysis. It helps in
comparing the performance of various companies and
judge their financial soundness i.e. appraisal of the
project, health of enterprise, performance index and
index of pitfalls. The objectives of financial analysis are
THE LICKS
to develop the project from financial angle and to
identify financial characteristics.

THE MAIN PURPOSE OR OBJECTIVES OF


FINANCIAL ANALYSIS

 To know the earning capacity or profitability,


 To know the solvency, financial strength,
 To make comparative study with other firms,
 To know the capacity of payment of interest and
dividend,
 To know the trend of the business, to know the
efficiency of management,
 To provide useful information to the management.

IMPORTANT ASSUMPTIONS
THE LICKS

There are following assumptions THE LICKS has:


• A constantly growing economy without any major
recession or boom;
• No unpredictable changes in Coffee shop or
catering services.
• No national or global events that threaten the
stability and services of the country and citizens.
• Current interest rate (8.92%) will be same for the
three years.
• Tax rate also be same for the coming three years.

MEANS OF FINANCE

Finance is one of the basic requirements of the project.


The entrepreneur needs capital start with and he/she
needs Financial Assistance with every steps of the
project. As various costs are associated with it, To
need the cost of the project following means of finance
are available. :-
THE LICKS

1. Owner’s contribution
2. term loan
3. Reinvestment of profits

1. Owner’s contribution- Because this is sole


proprietorship business my contribution is Rs 6,
00,000.

2. Working loan (4,00,000)- We would be getting this


middle term finance from SBI bijpur branch.

3. Reinvestment of profits – During the substantial


years, we will be reinvesting the profits earned.

COST OF THE PROJECT


FIXED COST
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PARTICULARS AMOUNT
Expensed equipment 10, 00,000
Furniture 80,000
Vehicles (on lease) 5, 40,000
Computer 1, 00,000
License 50,000
TOTAL
17,20,000
VARIABLE COST

PARTICULARS AMOUNT
Rent 1,80,000
Advertisement 50,000
Insurance 20,00
0
Brochures 4,000
Electricity 20,00
0
Telephone Bill 40,000
Salary(permanent+ 40,84,000
temporary)

Maintenance 20,000
TOTAL VARIABLE COST 44,18,000
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TOTAL COST OF THE PROJECT

= FIXED COST + VARIABLE COST

= 1720000+4418000

= 6138000
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PROFIT AND LOSS STATEMENT OF THE DIVINE


FOR THE YEAR ENDED 31ST DECEMBER,2010
Dr. Cr.
PARTICULARS AMOUNT PARTICULARS AMOUNT
(Rs.) (Rs.)
To purchase 39,00,000 By sales 84,45,000
To Salary 40,84,000
To gross profit 4,61,000
c/d
84,45,000 84,45,000
To insurance 20,000
To telephone 40,000 By gross 4,61,000
charges profit b/d
To electricity 20,00
charges 0
To office rent 15,000
To legal 50,000
charges
To maintenance 20,000
charges
To 50,000
Advertisement
To interest on 89,200
loan
To broachers 4000
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To net profit 1,52,800

4,61,000 4,61,000
NET PROFIT FORE CAST

years PROFIT
2010 1,52,000
2011 1,82,000
2012 2,02,000

BALANCE SHEET OF THE DIVINE


AS ON 31ST DECEMBER 2010

LIABILITIES AMOUT(R ASSETS AMOUNT


S) (RS)
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Capital 19,00,000 Cash in hand
10,00,000
ADD Furnitures 80,000
Net profit 52,000 19,52,000 Less
(dep.@5% p.a) 4,000 76,000
Bank loan 10,00,000 Machinery and
ADD equipments 10,00,000
Interest 8.92% 89,200 10,89,200 Less
(dep.@6%
p.a) 60,000 9,40,000

Vehicles 5,40,000

Computer 1,00,000
Less
(Dep. @ 1%) 1,000 99,000
Investments 2,94,200
30,41,200 30,41,200

BREAK EVEN ANALYSIS

CONTRIBUTION = SALES –VARIABLE COST


1.
=84,45,000 – 44,18,000
= Rs. 40,27,000

2.PROFIT VOLUME RATIO = CONTRIBUTION 100


(P/V RATIO) SALES
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100

= Rs. 47.685 %

3. BREAK-EVEN POINT (IN Rupees)=

= 36070.043

Hence, the break even point in which there is no profit


no loss is at 36070.

RATIO ANALYSIS

LIQUIDITY RATIO

1. CURRENT RATIO

=
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= 1:1

ideal current ratio=1:1, I maintain a sound current


position, the firms has a good short term solvency.

2. PROPRIETORY RATIO

High Proprietary ratio indicates High Margin for


Creditors. in our case it is very high ensures good
margin of safety to the creditors but not to the firm.
So, we have to look after our proprietary ratio to
reduce it, to ensure maximum utilization of funds

LEVERAGE OR SOLVENCY RATIOS


THE LICKS

1. Debt Ratio

=0.256
The debt ratio of 0.256 means that
lenders have financed 25.6% or about one-
fourth of THE DIVINE net assets(capital
employed).it obviously implies that owners
have provide the remaining finances. They
have financed: 1-0.256 =0.744 =74.4% or
about the three fourth of net assets.

2. Debt-Equity Ratio
=

= 0.345
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3. Capital Employed To Net worth Ratio

1.345

TURNOVER RATIOS

1. Capital Turnover Ratio

=
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The net assets turnover or capital turnover


ratio of 2.95 times implies that THE DIVINE is
producing Rs. 2.95 for one rupee of capital
employed in net assets.
2. Fixed Assets Turnover

= 4.91times

3. Current Assets Turnover


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1.94 times

THE DIVINE turns over its fixed assets faster


than current assets. Interpreting the
reciprocals of the ratios, one may say that
for generating one rupee, the firm needs
respectively Rs 0.20 investment in fixed
assets and Rs 0.50 investments in current
assets .
PROFITABILITY RATIOS

1. Gross Profit Margin


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= 0.055 or 5.5%

The gross profit margin reflects the


efficiency with which management produces
each unit of products. The ratio indicated the
average spread between the cost of good
sold and the sales revenue. When we
subtract the gross profit margin from 100
percent, we obtain the ratio of cost of goods
sold to sales that is 94.5%.
2. Net Profit Margin
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0.0181 or 1.81%

3. Operating Expense ratio

0.98 or 98%

The operating ratio for THE DIVINE indicates


that 98 percent of the sales have been
consumed together by the cost of goods sold
and other operating expenses.
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4. Return on Investments
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ORGANISATIONAL STRUCTURE

There are two division of THE LICKS: “COFFEE SHOP


AND CATERING SERVICES”. With the growth of the
company more division will be created as the demand
for services increases. We have 40 employees at start
including me

1) Shubhodeep Bhattacharya: CEO and founder of


THE DIVINE. Mr.Bhattacharya is responsible for
managing, guiding, directing and control activities
of the company.
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2) There are five main chefs who will manage all orders
received from customers and employees .

3) There are 25 permanent workers who will serve in


administrative building and we will have shuffling of
the workers on a semi-anually basis.
4) THE LICKS have 5 servants who are trained in each
and every home service like cleaning, washing,
cooking etc. There are list of indirect servants who
will be available with us when we contact them.

5) There are 5 expert electricians and we have a list of


many electricians they will be available with us
when they require.

6) THE LICKS also have a list of trained security


guards.

7) THE LICKS will have a list of 30 workers who will be


available if there is requirement for more workers.
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8) THE LICKS will have 2 trainers who will train all


employees for their respective jobs.

9) Because THE LICKS will have“call and get” service it


will have 2 call operator who will manages calls and
take their orders. They will be paid on a daily wages
basis.

SALARY STRUCTURE

THE LICKS will have the following salary structure:

DESIGNATION SALARY
Workers 15,000
Electrician 8,000
Servants 7,000
Call operator 4,000

REQUIREMENTS, RECRUITMENT AND


SELECTION
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For hiring or recruiting Engineers, expert electrician,
call operators, and trainers we give advertisement in
the News papers and magazines. We also use some
brokers who will bring labour for us. The eligibility
criteria for will be mentioned in the
advertisements.The electricians must have a graduate
degree (ITI people will prefer) and must be
experienced one. The call operators and Receptionist
must be 12th pass and has a good communication skill
especially in Hindi, English . Other employees work&
experience will matter rather than graduation. All
employees have the ability and desire to work will be
hire for jobs.

TRAINING AND DEVELOPMENT

We will have two trainers who are expert in training


employees. They trained employees how to perform
their work effectively and efficiently. We also
periodically organize some training programmes for
workers so they aware about new ideas design and
way of doing works.

RISK ASSESMENT
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Thought the plan is very concrete and SWOT analysis
has been done but still there are few risks which can
act as hindrance during the commencement of the
business. They have been noted down as follows:
Refutation of loan from bank can cause a big risk
before commencement.
It is a new company so it might be at risk that
whether the business will take off properly or not.
Due to limited amount of capital at initial stage
may cause a situation of shortage of capital
 The company is in the business of apparel and is
susceptible to continuous change in the tastes and
preferences of the consumer. Thus, it has to keep
abreast of the rapid change in the buying habits and
latest service trends. Loan asked from bank is also
limited.
The company might face the stringent Government
policy due to which the plan may face difficulty in
implementation of it.
Thus in short the company might face risk during the
initial period but once it get properly established the
company may not fall under any above –mentioned
circumstances until and unless it flourishes.
THE LICKS

CONCLUSION
From the questionnaire survey the future of THE LICKS
firms looks great. Though there are some obstacles
and risks but they can be crossed with hard work and
experience. According to survey the people of Rihand
nagar really needs a shop and service which will
provide these types of services especially in just call
and get.

Among the coffee shops there are very companies


running successfully. But we have some quality which
makes us differ from others. One of the greatest
barriers in service would be the individual local
servants, driver, electrician and plumbers, but we are
providing experienced people and just call and get
with same cost. Though there are these types of
competitors in services and other competitor’s in
house construction it would be a challenge for THE
DIVINE to get most of the contracts and raise its
goodwill to occupy the leading position in the market.
it will never forget the basic values and ethics of
business.
“THIS IS OUR MOTTO”

LET’S HOPE FOR THE BEST!!!!

COMPANY LAYOUT
THE LICKS

FANENDRA
SHARMA’S
OFFICE
(CEO)

TRAINER OFFICE
AND TRAINING
ROOM

ARCHITECH
ENGINEER ARCHITECH
ENGINEER

CALL OPERATOR
CALL OPERATOR
THE LICKS

SOURCES RECEPTION
OF INFORMATION

PRIMARY DATA:-

Information collected through questionnaires

SECONDARY DATA:-
From Newspapers like;-
The Telegraph
Economics Times
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Prabhat Khabar
From magazines like:-
Business World
Business week
Outlook

QUESTIONNAIRE

NAME :
AGE :
OCCUPATION :
INCOME :
Q.1 Are the home construction company are serving
your purpose?
1) YES 2) NO
Q.2 Do you have any servant?
1) YES 2) NO
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Q.3 Do you require painter, plumber, electrician,
house cleaner?
1) YES 2) NO
Q.4 Are the home services (servant, painter, cleaner,
plumber, electrician) are serving your purpose?
1) YES 2) NO

Q.5 IS house construction and home service provider


are requiring in Raipur?
1) YES 2) NO
Q.6 Do you face any problem or difficulties in contact
or searching those people who give home
services?
1) YES 2) NO
Q.7 level of difficulty:
1) low 2) moderate
2) high 4) very high
Q.8 usually how much time it takes to search for those
services?
1) Within 2 hours 2) between 3 to 7 hours
3) Between 8 to 12 hours 4) more than it
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Q.9 do you want that these service are available to at
a call ?
1) YES 2) NO
Q.10 IF a firm organizes for you house construction
and home services would you be interested?
1) YES 2) NO
THE LICKS

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