General Company Description

Bathing Soap Manufacturer

Our Company name is Praakrtic Soaps (Natural Soaps).At the starting company will be focusing on
the bathing soap only in future we will be also other products of this industry like shampoo, hand
wash, body wash. Starting of Business Company has to suffer because there is big competition in this
industry. To overcome that we will make product different and also we will use cost leadership
strategy by utilizing local raw material and labor.

Praakrtic soaps is a soap manufacturing company located in the rural areas of Lakshmangarh,
Rajasthan with a motive to manufacture best quality soap. This also helps the rural people to earn
their livings by providing them employment and helping the women of the community to become
self-dependent.

There will be initially two types of soaps that will be manufactured:

Aloe Vera soap: Aloe Vera is a widely used natural product in hair care and skin care
product. This aloe Vera based soap is rich in moisturizing properties. This also heals the dry,
rough skin. In fact, aloe Vera is also good for the oily skin.
Muiltani Powder soap: Multani mitti is a great skin healing and prickly heat preventing
product. This soap absorbs the excessive oils.

Mission Statement:

Our mission is to create value for customers and shareholders by continually improving health,
reducing preventable illnesses and enhance beauty through the use of our soap.

Company Goals and Objectives:

Short Term Business Objective:

To manufacture Soap packets as per the demand of the customers

To maintain a low cost to grab most of the market share

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 To provide the customers with a good quality soaps with a different range of herbs.
To achieve a huge customer base in Rajasthan region and all near-by states in India
To provide customers an ease of access to our product Products
To establish a good supply chain
To attract customers through advertisements

Long Term Business Objective:

To increase the production capacity of the company by installing new and efficient machines
To expand the business overseas by exporting products to other countries where the demand for
herbal soap is huge, and also to create demand in less demanding countries
To achieve Total Quality Management (TQM)
To eliminate wastage during production

Business Philosophy: Allure soap is such an soap manufacturing company where maintaining the
quality of the product and retaining the customers by providing them the product on which they can
rely upon and always be satisfied with the companys services for the them.

Customers: our target customer is women. All age and different occupation women we will target.

Porters Five Forces Model:

Rivalry among Existing Competitors: Competitors the rivals and contenders who are dealing in the
same product in which you are dealing. The competition is highest when there is existing player with
a huge market share, and also when any new entrant has something better than your product for the
same customers to whom you are catering to. Allure faces a tough competition from various
competitors like:

Patanjali
Himalya
Madimix
Emami
Lux
Dove
Pears
And various other local and regional brand

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The companies in this industry mainly face price wars with their competitors. They attract their
customers by providing the best price possible to the customers and also making the product
available in different price packets so that is becomes affordable to each section of the society,
stratified on the basis of income level. The various other reasons for the success of the above
mentioned companies are their continuous research and development with the product, increasing the
product line, expansion of company in foreign markets. The industry growth is also high so even the
multinational companies are turning towards this business seeing the demand of product in domestic
and international market.

Bargaining Power of Supplier:

The soap manufacturing process uses natural raw materials, for which there are numerous
suppliers of these raw materials so even if the supplier charges high prices company can
switch over to other suppliers so the bargaining power of suppliers is low.
Importance of industry: The soap industry is very important as there is huge and continuous
demand of soap in the market, so we can say that the main customers for the suppliers of
these raw materials are the companies itself.
The companies purchase the raw materials in bulk which increases the importance of buyers
as for these suppliers this industry is the main customer of their raw materials.
These raw materials are undifferentiated and can be purchased easily from other suppliers.
The buyers generally have the full information about demand, actual market prices and
suppliers cost. This make the buyer to ensure that it get the raw material in most favorable
prices.

All these factors contribute to the fact that the bargaining power of the supplier for agarbatti industry
is very low, and also negligible.

Bargaining power of Buyers

The buyers hardly bargains on such low cost products and the products which are FMCG products
i.e. those products which are used on a day to day basis, buyers are ready to pay without actually
asking for bargaining the price. Also in an organized sector the companies provide profit margins to
their retailers these margins are according to their cost of production some provide more margin and

3
some players provide less margin but this also differentiate their quality. For example Cycle brand
gives fewer margins to their retailers but they dont compromise on quality which differentiates their
product and makes loyal customers. Also the customers are offered a range of various price packets,
among which they can choose which ever they find affordable. In this industry there is no bargaining
power of buyers.

Threat of Substitutes: The substitutes of soap are:

Threat of New Entrants

It is a small scale industry, low investment is required, and suppliers of raw materials are easily
accessible. There is no or very low switching cost. There is a product differentiation in organized
sector which forms only 20% of the industry and rest is unorganized sector in which there no
differentiation of the product they are more or less similar. The firms which are registered and work
at some average level are taxable otherwise the small players in the industry are non-taxable which
makes the new entrants easier to enter. National and Multinational companies are also seeing the
opportunities in the industry as the demand of soap are increasing in domestic and international
market.

PESTEL Analysis: PESTEL analysis is a framework or tool used by marketers to analyze and
monitor the macro-environmental (external marketing environment) factors that have an impact on
an organization. PESTEL stands for Political, Economic, Social, Technological, Environmental,
Legal factors.

Political Factors: The political environment to which the company belongs plays a major role in
determining the growth factor of the industry. These are all about how and to what degree a
government intervenes in the economy. This can include government policy, political stability or
instability in overseas markets, foreign trade policy, tax policy, labor law, environmental law, trade
restrictions and so on.

As per the government policy of 2016 Public Sector banks like NABARD, SIDBI, NSIC, are
those banks which are setup to support the small scale cottage industries in India by
providing them loans at a minimum rate of interest, also these banks provide guidance and
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 assistance of how the small scale industries can work well and manage a good financial
records
There are various MSME schemes by the Indian Government to support the entrepreneurs
who are investing their money in the business in the rural areas of India
Government of India also have schemes for the development of women in the rural areas
Government program of make in India is also going to help every entrepreneur in the
business initiative
The ASPIRE Scheme of developing the rural industries and entrepreneurs is also a gift from
the GOI for all MSMEs

Economic Factors: Economic factors have a significant impact on how an organization does
business and also how profitable they are. Factors include economic growth, interest rates, exchange
rates, inflation, disposable income of consumers and businesses and so on.

The economic condition of citizen of India is improving, the spending power of the citizens
have increased due to the hike in the income of the people, these factors indicates that any
investor or an entrepreneur can enjoy a huge customer base and can expect a huge profits in
their business
The interest rates for providing the loan term loans by all the public sector banks is in the
range of 0.2% - 0.5%, helping the borrower of loan without burdening them with a huge
interest to paid in installments during the time of repayment of loan
For the small scale industries the tax rates are also low

Social Factors: Also known as socio-cultural factors are the areas that involve the shared belief and
attitudes of the population. This factor includes population growth, age distribution, health
consciousness, and career attitudes and so on. These factors are of particular interest as they have a
direct effect on how marketers understand customers and what drives them.

Technological Factors: We all know how fast the technological landscape changes and how this
impacts the way we market our products. Technological factors affect marketing and the
management thereof in three distinct ways:

New ways of producing goods and services

New ways of distributing goods and services

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 New ways of communicating with target markets
Technology could also be used for online advertising of the product and also selling of the
product, giving the customers an ease of accessibility to the product

Environmental Factors: These factors include all those that influence or are determined by the
surrounding environment. Factors of a business environmental analysis include but are not limited to
climate, weather, geographical location, global changes in climate, environmental offsets etc.

Raw materials used in the manufacturing of soap is all the natural ingredients, therefore they
dont pollute the environment
Few raw material like bamboo stick and charcoal is such raw material which have scarcity in
India, and hence need to be imported, stills these raw materials are biodegradable in nature
The smoke produce from the burning of the agarbatti is also very less causing a negligible
harm to the environment

Legal Factors: Companies need to know what is and what is not legal in order to trade successfully.
If an organization trades globally this becomes a very tricky area to get right as each country has its
own set of rules and regulations.

The legal papers regarding the registration of the company with its name and product will be
generated by abiding all the legal laws
The company will not appoint any child as labor in the firm
The company will provide their workers the minimum salary to be paid
The company would try to provide a healthy and save environment to its employees
The company would work best to maintain the best quality possible of its product

Legal form of Ownership: Allure is a sole proprietary business owned by Ms. Annu Kanwar. The
reason for having a sole proprietary business is that this business is a small scale business and has a
very little initial investment; due to this reason Allure is a sole proprietary business.

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7
Products and Service

8
 Marketing Plan

A business is like an umbrella under which various departments like human resource, finance,
marketing, operations which unites together to work for a single objective. For any business to run
well it needs to focus on all these edges of the business, with a main focus on marketing of the
product which the company has brought or is willing to bring up for its customers. For a planned
process of marketing the product the company needs to create a successful market plan. A good
marketing plan describes the product or service which a company is offering, along with the
description of the strategy of the product would be marketed, and a budget is decided by the
company describing the amount that the company is ready for spend for the promotion of its product.

Market Research: The process of gathering, analyzing and interpreting information about a market,
about a product or service to be offered for sale in that market, and about the past, present and
potential customers for the product or service; research into the characteristics, spending habits,
location and needs of your business's target market, the industry as a whole, and the particular
competitors you face.

Market research helps a new business initiative to conduct a survey from the customers or could
analyze the past records to gather knowledge about:

the current market scenario

Demand analysis of the product

What new could be offered by the customer

What is the price range a customer is willing to pay

What variation could be brought in the product

What services do customers expects from a new firm

Are the customers satisfied from the existing products in the market

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After conducting the survey the data is gathered and is analyzed to draw conclusions, based on the
conclusions the company formulates its strategy of how the company would work there on focusing
on the key points of the analysis results.

Objective of the Survey: The objective of conducting the market analysis before starting my
business initiative of bathing soap manufacturing is to know all the nitty-gritty of the market, and to
plan accordingly my strategy for selling my product and serving customer in the best possible way.

Sub-Objective of the Survey: The sub-objective of the study are:

Demand Analysis

Demand estimation

Forecasting demand

Competitors details

Research Methodology: It is the way to systematically solve the research problem. It is a process of
collecting the data for conducting analysis and then using the data to draw result. The data could be
either the historical data or a completely new set of data also known as primary data. This study is
based on analyzing the customer buying behavior for bathing soap, to analyze their buying pattern,
and to estimate the demand as per the analysis and also to know the competitors level of positioning
in the customers mind. The choice of the many methods for collecting fishery data will depend on
the variables to be measured, the source and the resources available

Nature of the Data: The nature of the data for this study is primary. Primary data are such data
which are raw and have never ever analyzed before. The research conducted using the primary data
is called primary research which is carried out by questionnaire, which is based on the study or the
analysis to a targeted set of customers.

Defining the Targeted Population: The target population was selected randomly from the entire
person who purchased agarbatti for any of the purposes, i.e. either for religious purposes or for
fragrance purpose, also few people out of the population who didnt used agarbatti were also targeted
to know their reasons for not purchasing agarbatti. Also the other set of population selected where
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the retailers or the other manufacturers of agarbatti. So in a broad sense there were two set of
targeted population:

Customers

Manufacturers and retailers of agarbatti

While selecting the targeted population demographic factors which were considered were:

Occupation

Age

Sampling Technique: Sample is subset of target population which shows the same kind of behavior
as the population. Sampling is the way of identifying the process of how the population sample has
been selected for research. Sampling could be done in two ways:

Probability Sampling: It is situation where the sample has the known probability of being
selected

Non - Probability Sampling: Sample does not have known probability of being selected as in
convenience or voluntary response surveys

For this study we used the Convenience sampling Technique which is one of the types of Non-
Probability sampling technique. Convenience Sampling Technique is a method where the population
is selected because of its convenient accessibility and proximity to the researcher.

Sample Size: The sample sizes for customers were 100 and for manufacturers and retailers it was 10.

Research Tool: Questionnaire has been used as the research tool for the analysis. In all two
questionnaires were prepared, where one of the questionnaires was for the customers and another
questionnaire was for the wholesalers and retailers. The developed questionnaire has both open and
close ended questions. Language used in the questionnaire is very simple and no jargons are used.
Questions are framed considering the need of information as previously mention included.

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Analysis of questionnaire

Q.1 Gender

Male Female

100%

Interpretation: We have targeted only female customers only.

Q.2. Occupation:

Sales
student House Wife Working

27%
35%

38%

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Interpretation: We collected information from different occupation women out 100 there are 38 are
house wife, 35 are student and 27 are working.

Q.3. Age:

Sales
15-25 26-35 36-45 Above 45

3%
17%

45%

35%

Interpretation: We collected information from different age group women out of 100 there are 45%
are between 15-25, 35% are between26-35, 17% are 36-45 and only 3% are above 45 age.

Q.4. What your family monthly income?

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 Sales
upto 15000 15001-25000 25001-35000 35001-45000 Above 45000

11%
20%

17%

24%
28%

Interpretation: We founded that 20% women belongs to above 45000 thousand income family, 24%
belongs to 35001 to 45000,28% belongs to 25001 t0 35000, 17% belongs to 15001 to 25000 and
only 11% belongs to up to 15000 monthly income which means we can sell our product and demand
for our product is there.

Q.5.Are you User of bathing soap?

User of Soap
Yes No

100%

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Interpretation: The figure above shows the percentage of users and non-users of soap, 100% are the
users, from which it can be interpreted that the demand for soap is there in the market.

Q.6. Do you prefer liquid or solid soap?

Column1
Liquid Solid

5%

95%

Interpretation: The figure above shows the percentage of users of liquid soap are 95 percentage
only five 5percentage uses solid soap, from which it can be interpreted that the demand for solid
soap(bar soap) is more there in the market.

Q.7 which kind of bath soaps do you like?

Sales
Foamy Thick lather Transparent Milky
Colored Glycerin Medicinal Herbal

4% 7%

20%
52%
4%
5%
8%

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Interpretation: Above graph shown that 52 percent people like herbal soap, milky 20 %,medicinal
8%,transparent,7 %,thick lathert0%,coloured 4%,glysrin 5% .It means for our product there is high
demand in the market because now a days people are liking more herbal soaps.

Q.8. from where do you usually purchase bathing Soap?

Sales
Retail store Wholeseller Distributor Manufacture

7%
10%

25% 58%

Interpretation: We founded that 58% people by soap from retail store, 25% buy from whole seller
and 10% from distributor only 7% buys from manufacture directly.it means we have distribute our
product accordingly.

Q.9. what is the size of the Soap you usually purchase?

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 75g 125g 150g 250g

2% 8% 22%

69%

Interpretation: 69% women said that they prefer 125g size, and 22% said that they prefer 75 gram
among 22% most of them are students.so we will produce our soap in two sizes 125g and 75g.

Q.10. which scent of soap would you prefer?

Unscented Rose Lemon Orange Jasmine

10% 5%

18%

42%

25%

Interpretation: most of people like rose fragrance in soap and 25 people like lemon fragrance we
will produce in two fragrances rose and lemon.

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Q.11. what shape would you prefer?

Rectangular Circle Oval Heart

10%
5%

85%

Interpretation: almost 85% people want soap in oval shape so we will be having oval shape of our
soap.

Q.12. Do you change from one brand of soap to another?

Sales
yes No

4%

96%

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Interpretation: 96% women said that they changes the brand of soaps it means as anew brand we
can grap the market.

Q.13. How often did you change brands in the last 6 months?

once twice many times Never

22%

44%

34%

Interpretation: there is huge population who changes from one brand to second brand.44%people
said that they change the soap brand once in last six month.

Q.14.You came to know about soap from:

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 Sales
Newspaper advertisements Radio
TV advertisements Word of mouth
Point of sale

18% 10%

21%
51%

Interpretation: 51% said they came to know about the soaps from TV advertisement, so we will do
TV advertising and social media advertising and also we make good brand image of the company.

Q.15. Does celebrity endorsement prompts you to purchase soap?

Yes No

28%

72%

Interpretation: 72% said that celebrity endorsement doesnt promote them to purchase the soap so
we will not sue celebrity in advertising.
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Q.16. Please tell how important is that attribute while using the BATH SOAPS

Very Somewhat Neither Somewhat un Not at all

important important important nor important important
unimportant

A
FRAGRANCE

B COLOUR

C LATHER

D PRICE

E
PACKAGING

F BRAND

G
DESIGN/SHAP
E

H Ingredients

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 70

60

50

40
Very important
30 Somewhat important
Neither important nor
20 unimportant
Somewhat un important
10
Not at all important
0

Interpretation: almost 40% said that fragrances is somewhat important, 38% said that color is
somewhat important. Prize and ingredients are more important than others.

Q.16 Do you like herbal soaps?

yes no

49% 51%

Interpretation: 50% out of population like herbal soaps iot means there is huge market for our
product.
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Q.17 If you like herbal soap which type of you like?

Multani soap aloe vera

42%

58%

Interpretation: out of our population 58%like aloe Vera soap, 42 like multani soap.

Barriers to entry:

Competitors: My Company faces a strong competition from the other soap manufacturer.
There are various known branded company for agarbatti and also many local manufacturers
having a great share in the local market
Lack of Information: The small business struggles to find customers who lack information
regarding the local brands. A lot of promotional activity needs to be carried out to place the
image of the company in the mind of the company.
Barriers relating to consumer and sales law, and consumer information: differences in the
right to cancel and return purchases, and specific requirements on the provision of
information to consumers is particularly problematic for e-commerce businesses, which often
sell in a large number of markets simultaneously.
Differences in the right to cancel and return a purchase create costs and administrative
difficulties. A common problem for the traders is the variation in consumer legislation in the
different countries where they operate. This primarily relates to the right to cancel or return a

23
 purchase. A number of companies saw these variations as a major barrier, while others
considered them to be less of a problem as they thought it was relatively easy to adapt to the
different requirements. The latter were often companies with large sales volumes and
generous return policies.
Rules concerning consumer information and website content: Many businesses have
described laws and regulations dictating what information websites must and must not
contain as problematic for their business operations. A common problem is the requirement to
use local languages. Businesses regularly adapt their websites to the local language.
Payments and taxes: requirements for specific payment solutions and differences in tax
regulations create costs and administrative problems.

Product Features and Benefits:

Product Features Benefits to Customers

Fragrance The customers would get a wide range of fragrances in soap

Quality The customer will get a good quality soap

Price The soap would be made available in almost every price range

The soap would be made available in wide range of colors, fragrances

Attractiveness and make it look attractive

Accessibility The product would be made available in every small grocery stores,
retail stores, super markets and also online

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 Services: The customers would be able to avail services like:
Online payment

Home delivery for bulk orders

Customers complaints and advices forum
Customers

We are targeting only females. We are targeting all age group women basically 15 to 45.we will sell
our product through the channels distributors, wholesalers, and retailers because during market
survey we came to know that people like to buy soap from nearby stores. Firstly we will focus on
Sikar market only.

Competition

Patanjali

Himalya Herbal

HUL

Medimix

Competitive Analysis

Importance
Factor Me Strength Weakness Competitor
to Customer
Product Aloevera soap Competitors have 1
Multani soap different variety of
agarbatti products
Price Different price Most of the competitors 2
packets ranging dont have this huge
from Rs.2- Rs 50 price range
Well trained The competitors have 5
Quality workers machinery for
production
Online order Most of the competitors 1
placements, dont have these
Service Online payments, services
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 Complaint and
advisory cell
A legally Most of the local 2
registered brand manufacturers are un-
Reliability
and no un-lawful registered
activities
The workers wont Competitors have 5
hold high expertise highly expertise labors
Expertise
as they might be
new to business
Follow all legal Most local 2
Company
regulations and manufacturers dont
Reputation
norms follow legal regulations
Convenient to Most of the competitors 1
customers dont provide ease of
Location
location, like online
services
Attractive colors, No color variations 2
Appearance
smooth finish,
Customer can Not available online 1
Sales purchase online, or
Method from grocery
stores, markets
For purchase Competitors have 3
Credit
above Rs. 50,000 credit policies for less
Policies
than Rs. 50000
TV ads, pamphlets Not all local 1
Advertising
in newspapers manufacturers advertise

Promotion: we will go to use

Advertisements: TV advertisements, Pamphlets in newspapers

Online advertising

Sales and promotion

Promotional Budget:

TV ads and Newspapers: Rs.50000

Sales Promotion: Rs. 20,000

Pricing: the soap would be made available to the customers in two ranges:

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Aloe Vera soap

125g - 20
75g- 13

Multani soap

125g - 40

75g- 30

Proposed Location: we will distribute the soap starting in Sikar only. Later we will expand in whole
Rajasthan.

Distribution Channels

The raw material first reaches from the suppliers to our company, where after manufacturing the
product, it is sent to the distributors and from the distributors to the super markets, retailers, grocery
stores. Also for online sale, distributor or nearby retailer is asked to meet the orders.

Manufacturer

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Demand and supply Gap:

Demand Forecast

Particulars Monthly demand Yearly demand

Multani soap 195273 2343276
Aloe vera soap 269662 3235944
Total 464935 5579220

Supply
Particulars Monthly supply Yearly supply
Multani soap 191939 2303276
Aloe vera soap 266667 3200000
Total 458606 5503276

Gap
Particulars Demand Supply Gap
Multani soap 2343276 2303575 22701
Aloe vera soap 3235944 3200000 35944
Total 5579220 5503276 53923

Sales Forecasts:

The sales of the company are expected to grow by 10% approximately every year.

Year Sales Forecast (Rs.)

1 53923

2 59315

3 65247

4 71772

5 78949

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29
 Technical Analysis & Operational Plan

Manufacturing Process: we will use hot process of manufacturing soap. And the plan will semi-
automated. Mainly there will be manufacture two types of soap.

Aloe Vera soap

75grams
125 grams

Multani soap

75g
125g

Quality Control & Standards

In order to manufacture good quality soap, it is utmost urgent to purchase good quality of raw
material from only the established and renowned suppliers. Before putting the raw material into
operation all those has got to be tested for their chemical properties at the gate testing facilities and
after the finished product. Quality means the producer has to satisfy the desire and urge of uses.
Keeping in view the demand of people from quality point of view it is necessary to adopt better
technique of manufacturing and good quality of raw material. To manufacture good quality soap we
will use total quality management.

Customer service

The customers will be provided with mainly two options of purchasing soap directly from local
vendors, or they can make bulk order at the manufacturing center. Customers will be provided with a
toll free numbers to place orders, provide feedbacks or they can file complains on the same number,
also a webpage under the name of the company for the same will be made available to customers.

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Product development

Right now we are offering only three range of soap according the consumer demand we will make
changes in soap what type of soap consumer are demanding we will make according because every
time the taste of consumer changes. Two make product every time we will create change in product
by research and development. Present era people are more demanding natural product at this time
will make herbal soap.

Choice of Technology

Plant capacity: Plant capacity is 20 tons per month

Principal inputs

Investment outlays

Adoption of technology by other manufacturing firms

Product mix:

Aloe Vera soap

75grams
125 grams

Multani soap

75g
125g

Appropriateness of Technology

Soap manufacturing process is a highly labor intensive process which utilizes the raw material that is
obtained from various places, even though most of the raw material are obtained from local
suppliers, few materials like coconut oil, fat acid, palm oil need to be transported from different
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states within the country. My firm will also utilize local man power for the production process, as the
manufacturing process is semi-automated, so I will appoint skilled, semi-skilled and unskilled labors
for the same, and would try to utilize their talent and capabilities in the best possible way. Soap
manufacturing process possesses no safety hazards to its employees, but possesses a great threat to
those employees who are allergic to dust and power or any other kind of perfumes. The soap
manufacturing process is in harmony with social and cultural conditions and doesnt violate any
norms or religions as every religion mostly uses these products. Soap is basic for a human being to
make clean self.

Material Inputs & Utilities

Raw materials (for 1 month)

S. No. Description Quantity Rate /Kg Amount

()
1 Mulltani stone 9000kg 10 90000
2 Aloe Vera 10000kg 5 50000

4 Coconut oil 600ltre 90 36000

5 Fate acid 800kg 50 40000
6 Caustic Soda 600kg 50 30000
7 Curcuma Longa 500kg 80 40000
8 Rose water 351litre 250 87750
Total 373750

2 Utilities (for 1 month)

S. No. Description Amount ()

1. Electricity 12000
2. Water 8000
Total 15000

Plant Capacity: 150 tons per year

Technological requirements:

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Input constraints: The constraints with input is that each input is required for the manufacturing
process, i.e. each ingredient added in the manufacturing process of process plays an important role
absence of any one can be an hindrance to the manufacturing process.

Adoption of technology by other manufacturing firms: Other manufacturing firms such as

Patanjali, lux, dove have fully automated manufacturing plants.

Resources of the firm:

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 Human Resources: My firm employs the good quality personnel for managing the work and
labors trained properly in the manufacturing process of soap.
Quality and Fragrance: My firm would try to maintain a consistency in the quality of soap
manufactured, and would provide its customers with best quality in their soap that would
bring positive vibes in the house and refresh customers body.
Finances: soap manufacturing process doesnt requires a huge capital investment, hence
saving a huge sum of capital with the firm, which I would use in the marketing and other
advertising plans of the firm.
Trade Mark: Allure will be registering itself and will obtain a trade mark helping their
customers to recognize the company in the domestic and international market.

Government policy: As government of India has started new project of make in India, and my
project is not only supporting the campaign but also helping the rural people to earn their livelihood.
My firm will also abide by the norms of no child labors in the firm. Also a healthy and favorable
environment would be maintained in the workplace, to give the employees a good place to work at.
The minimum wages will be provided to all the employees of the firm.

Location & Site

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The location is the key success factor for the firm, providing the customers with an easy accessible
location and convenient location would be my main motive, so I have decided to set up my firm or
the distribution centers, most probably in a market place where people generally come to buy
products that are consumed on daily or monthly basis. My selection for location will also be based
on my availability of raw material, manpower, market and a scope for further expansion of the firm.
The manufacturing center will be confined in an area of 1000 square feet, in which of the area will
be used as store front and rest will be used as manufacturing center of soap. Firm will also have
stores in various major cities of India based on the same proximity. My firm will also have good
approachability to the suppliers of raw materials so that the raw materials could be made available
easily and the distributors so that the finished products could be quickly disseminated to the
customers. As Lakshmangarh is a place blessed with good sunlight throughout the year also since its
a rural place, there is huge availability of cheap labor. Since from cities the Lakshmangarh have a
pollution free environment, ensuring a good and healthy environment for the employees. As
Lakshmangarh is located on National Highway 11, it connects to various major cities of India
through road routes, which makes a favorable condition for my firm to be connected to my suppliers
and distributors and less need to maintain inventory as the settlements could be done on a real time
basis.

Machines & Equipment

Mixture
Triple Roller
Boulder
Cutting Machine
Packaging Machine
boiler

Environmental Aspects: The major environmental issues associated with the manufacture of soaps
and detergents are noise, air pollution, generation of hazardous wastes and effluent disposal.

We will take these actions for environment sustainability:

To only market products, which have proved to be safe for humans and the environment

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 While production, the manufacturers should carefully consider the potential health and
environmental effects, exposures and releases, which will be associated with the production,
transportation, use and disposal of different cleaning products

To encourage and promote transparent communication of safety and handling information

To facilitate basic research to resolve uncertainties around human and environmental safety
when they arise

To follow the spirit and intent of all national laws and regulations

Legal Environment

Licensing: Apart from corporate setup I need to get the name of my company registered so
that I can use this name in other areas of the country. By registering the name of the company
as a federal or international trade mark I can gain a huge market share in both the domestic
and international market.
The common start-up costs in this category would include assumed name registration fees
ranging from Rs. 1500 to Rs. 2500. A trade license from local authority would be required
costing Rs. 2500 approx along with a VAT registration.
Health, workplace, or environmental regulations: Allure would take all the required measures
to provide a healthy and safe environment to the employees, and a risk assessment would be
conducted, to assure the safety of the employees.
My company will use paper packets for the packaging soaps, with the motive to protect the
environment and provide the customers an ecological product.
Special regulations: Allure will also assure that the advertisements by the company wont
violate any laws or hurt sentiments of any religions and culture, and would provide the best
possible information required by the customers regarding the product.
Trademarks: A trade mark would be obtained legally to protect the brand name.

Personnel

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We will hire employees from local areas (sikar, laxmangarh) only because this will help us utilize
local manpower and will also give cost benefits

Employees required:

Type of
Purpose Number Pay Scale Total Amount
personnel
Payed
Required (per month)
Manger
Manage all process 1 25000 25000

Accountant Manage the finance 1 11000 11000

Skilled For manufacturing process 3 7000 21000

Semi-skilled For manufacturing process 2 6000 12000

Unskilled For manufacturing process 2 5700 11400

Sales person For deliver the products to 2 11000 22000

retailers , Distributer and
wholesaler

R/m Managing the Raw material 1 10000 10000

Security Security of factory 2 6500 13000

Guard

Total 14 125400

Training methods and requirements: Human resource management regards training and
development as a function concerned with organizational activity aimed at bettering the job
performance of individuals and groups in organizational settings. There are two methods through
which managers can improve their and employees knowledge and skills. One is through formal
training and other is through on the job experiences. On the job training is very important since real
learning takes place only when one practices what they have studied. For this company we will use
both on the job and off the job training methods.in on the job we instruct them how to accomplish

37
the task how to use their skills to perform the job. And off the job method we will use improve their
communication skills, attitude or other behavioral training we will provide.

Inventory:
We would like to maintain an inventory of the finished products as well as of the raw materials. As
my firm has good accessibilities with its suppliers and distributors the inventory maintained would
not be in bulk. A very less amount of inventory will be maintained to meet any sudden demand or
crisis of availability of the raw materials from the suppliers.
Suppliers:
The suppliers of raw material required for soap manufacturing would be selected from the local
providers who deal in the business of the required raw materials. The suppliers would be decided on
the basis of their past records of providing the raw materials to any other agarbatti manufacturing
company, their consistency in dealing and their and the prices which they will offer for the providing
the raw materials.
My company would employee a person who would be collecting the raw material from the suppliers,
also the company will have one extra supplier of raw materials just as a backup in case any one of
the suppliers fails to produce the items required. The cost of materials supplied would remain
constant and would fluctuate with a marginal value up or down the actual cost depending upon the
market situation.
A legal document would be prepared for conforming the deal and their privacy in not providing the
same materials to any other company.
The distributors of the company would also be abiding by the same norms which would be
mentioned in the legal document.

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Credit Policies

My company doesnt have any credit policy for its end customers but for whole sale retailers and
suppliers the company would be ready to provide the material on credit.

Soap business doesnt need to maintain any credit policy as such as the price of the soap is not too
high, but as my business is new, I would like to provide my ready goods on credit to my dealers.

The credit worthiness of the distributor or whole seller would be decided based on following criteria:

His income and ability to pay

His willingness to pay back within the stipulated time period

The credit would be provided for the purchase of Rs. 60,000 and above and for a period of maximum
2 months. The person opting will have to produce the entire required document before availing the
credit facilities. The documents would include

Income statement of the person

Bank account statement.
Capacity to sell the product more than the target estimated
Guarantor, who would ensure the payment, would be made under all circumstances and in
case the person fails, guarantor would be liable to pay.

The one who achieves more than the target would be offered few packets for free.

If the person fails to pay the money within the time period the company would take actions against
the person by putting an interest of 3 % on the amount.

39
 MANAGEMENT & ORGANIZATION

An organization structure is a layout of the organization, the way it works, how the role is divided
among various employees, coordination of the work and responsibility given to them so that the
organization works towards the achievement of a common goal. Allure works on with a systematic
structure of the organization, where the various roles are divided among various employees. The
work is divided based on the capability of the person and ability to produce the desired output.

The various roles at Allure are:

Manager/Owner: Annu Kanwar, to manage the work, manage demand and supply gap, to get orders,
manage finances, all other managerial activities.

Accountant: He will help to manager to manage finance

Skilled: A skilled employee is one who is capable of working efficiently of exercising considerable
independent judgment and of discharging his duties with responsibility. He must possess a thorough
and comprehensive knowledge of the trade, craft or industry in which he is employed.

Semi-skilled: A semiskilled worker is one who does work generally of defined routine nature
wherein the major requirement is not so much of the judgment, skill and but for proper discharge of
duties assigned to him or relatively narrow job and where important decisions made by others. His
work is thus limited to the performance of routine operations of limited scope.

Unskilled: An unskilled employee is one who does operations that involve the performance of simple
duties, which require the experience of little of no independent judgment or previous experience
although familiarity with the occupational environment is necessary. His work may thus require in
addition to physical exertion familiarity with variety of articles or goods.

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Sales person: A salesperson is an important sales management position maintaining vital link
between an enterprise and customers, society, distributors, retailers and others. Nature of roles
played by a sales person is given as follows:

A salesperson analyses customer needs and market trends and identify the linkages.
A salesperson is also an intelligent agent. He keeps the management informed of any
significant development in his territory, i.e., any strategic change of competitor etc.
A salesperson being in the forefront of sales organization can command on time and route
plans of sales organization.
He is a tactician in the sense that he (or she) evolves tactics to win over the customer or
enhance distribution/retailer satisfaction. A tactic is a short-term action plan and is part of a
strategy, which is a long-term concept.
Helps in demand estimation and building relationship with customers and channel member of
distribution

Security Guard:

Secures premises and personnel by patrolling property

monitoring surveillance equipment
inspecting buildings, equipment, and access points
Permitting entry

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Financial Analysis

Cost of Project

Particulars Cost in Lacs

Land & Site development 400000

Building 400000

Plant & Machinery 450000

Miscellaneous Fixed Assets 80,000

Preliminary Expenses 20,000

Preoperative Expenses 10000

Provision for Contingency 10000

Working Capital Margin 50000

Total 1420000

Means of Finance

Particulars Cost in Lacs

Promoter's Capital 520000

Long/ Medium Term Loan from Banks 900000

Special Incentive Scheme 0

Total 1420000

Interest on Term Loan

Year Total interest for term Payment Principal Loan Outstanding

loan Payment
42
0 900000
1 90000 237417 147417 752583
2 75258 237417 162159 590424
3 59042 237417 178375 412049
4 41204 237417 196213 215836
5 21583 237417 215834 2

Asset Valuation for Depreciation Purposes

Asset expenses Basic cost

Land 400000
Building 400000
Plant & Machinery 450000
Miscellaneous Fixed Assets 80000

Depreciation Schedule for Income Tax Purposes (WDV)

4th 5th
1st year 2nd year 3rd year year year
Building 38000 34390 31123 28166 25490
Plant & Machinery 90000 72000 57600 46080 36864
Miscellaneous Fixed Assets 20000 15000 11250 8437 6328
Total 148000 121390 99973 82683 68682

1st year 2nd year 3rd year 4th year 5th year
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Installed capacity in TPA 150 150 150 150 150
Production 60 75 90 113 128
Capacity Utilization(%) 40 50 60 75 85

A. Sales Realization 6900000 7590000 8349000 9601350 11041553

B.Cost of production 6439800 6924396 7454564 8306146 9280583
Raw Materials 4485000 4933500 5426850 6240877.5 7177009
Power & water 300000 306000 312120 318362 324730
Wages & Salaries 1504800 1534896 1565594 1596906 1628844
Factory Overheads 150000 150000 150000 150000 150000

C.Admn & Selling Expenses 130,000 140,000 157,250 165,763 176,551

Admn Expenses 30,000 35,000 47,000 50,000 55,000
Selling Expenses 100,000 105,000 110,250 115,763 121,551
Operating cost 6,569,800 7,064,396 7,611,814 8,471,908 9,457,133
D.Gross Profit Before
interest 330,200 525,604 737,186 1,129,442 1,584,419

E.Total Financial Expenses 90000 75258 59042 41204 21583

F.Depreciation 148000 121390 99973 82683 68682

G.Operating Profit 92,200 328,956 578,171 1,005,555 1,494,154

H.Preliminary Expenses
W/O 30000 28000 26000 23000 20000

I.Profit/Loss Before Tax 62,200 300,956 552,171 982,555 1,474,154

J.Provision for Tax 15550 75239 138043 245639 368539

K.Profit After Tax 46,650 225,717 414,128 736,916 1,105,616

L.Less: Dividend (If Any) 0 0 0 0 0

N.Add: Depreciation 148000 121390 99973 82683 68682

O. V Preliminary Expenses
W/O 30000 28000 26000 23000 20000

P.Net Cash Accruals 224,650 375,107 540,101 842,599 1,194,298

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