BUSINESS PLAN

ABOUT THE OWNER

I would take this opportunity to introduce myself. My name is SAKSHAM GOEL born and
brought up in city of nawabs LUCKNOW. Currently, I'm pursing my MBA in marketing and
finance from JAIPUTRIA INSTITUTION OF MANAGAMENT. I completed my graduation
from Lucknow University. My strengths are my positive attitude, self-motivated person, self-
disciplined. I am a good team player as well as has a good ability to lead the team. I can adapt to
any kind of environment. I am a good listener and quick learner.

My Long term goal is I want to be on master in the business which I am going to start that is
SOAP MANUFACTURING.

ABOUT THE PRODUCT

Soap is the term for a salt of a fatty acid or for a variety of cleansing and lubricating products
produced from such a substance. Household uses for soaps include washing, bathing, and other
types of housekeeping, where soaps act as surfactants, emulsifying oils to enable them to be
carried away by water. In industry, they are used as thickeners, components of some lubricants,
and precursors to catalysts.
We all know that oil and water don't mix. And so, since most dirt is grease or oil, water does not
wash it off. Soap is a cleverly constructed compound with molecules that absorb water, along
with molecules that absorb oil. The dirt gets trapped in the soap on your hands, and then washed
away by the water.
The exact origins of soap are unknown, though Roman sources claim it dates back to at least
600 b.c., when Phoenicians prepared it from goat's tallow and wood ash. Soap was also made by
the Celts, ancient inhabitants of Britain. Soap was used widely throughout the Roman empire,
primarily as a medicine. Mention of soap as a cleanser does not appear until the second century
a.d. By the eighth century, soap was common in France, Italy, and Spain, but it was rarely used
in the rest of Europe until as late as the 17th century.
Product and its Uses
Soap is a fast moving consumer good (FMCG) and an essential product used daily by billions of
people. The soap industry is divided into various segments – personal use, veterinary use and
laundry use. Personal care soap segment is dominated by large consumer goods companies,
whereas the veterinary use and laundry use segment is fragmented or dominated by a few large
players.

Market Potential
The soap industry includes about 700 companies with combined annual revenue of about $17
billion. 70% of India’s population resides in the rural areas and around 50% of the soaps are sold
in the rural markets. Indian per capita consumption of soap is at 460gms per annum. The market
is growing at 7% a year. This means that the incremental demand generation is 5% over and
above the population growth. With increasing awareness of hygienic standards, the market of
soaps could grow at a rate higher than 8% annually. Interestingly, 60% of the market is now
sourced from the rural sector.
Financial Aspects

1. Land and Building 750 square feet Rs. 750000

2. Covered area 500 square feet Rs. 150000
Machinery and Equipments

sr.no Name Quantity Rate Amount

1 Plodder machine 1 250000 250000
2 Miller machine 1 100000 100000
3 Sap stamping machine 1 80000 80000
4 Soap cutting machine 1 70000 70000
5
Total 500000 500000
Recurring Expenses

Raw Materials Per Month

sr.no Name Quantity Rate Amount
1 alkali 100lt. 125 12500
2 fat 300kg 60 18000
3 Talc 50kg 20 1000
4 Silica 100kg 130 13000
5 Volcanic ash 50kg 30 1500
Total=46000
Salary and Wages per Month
1 Skilled 3 15000 45000
2 Semi skilled 5 6000 30000
3 General 3 8000 24000
Utilities per Month
1 Power 12000units/month 4/unit 48000
2 Water 100000litres/month 2000
3
4
Other Recurring Expenditure per Month
1 Rent 0
2 Consumables 5000
3 Packing 22500
4 Transportation 15000
Total Working Capital Per Month
1 Raw Materials 46000
2 Salaries and Wages 99000
3 Utilities 50000
4 Other Recurring
Expenditure
Total Capital Investment
1 Machinery and 500000
Equipment
2 Working Capital 237500
For One Month

Cost of Production Per Month

1 Recurring
Expenditure
2 Depreciation @10% 50000 4166.67/month
Machinery and
Equipment
3 Interest on Total @10% 1500000 12500/month
Loan

Sales Receipt Per Month

By Sales 10000units
Production Cost 18.73/unit
Profit Per Month 50000/month

Sr.No. Item Fixed Cost Amount Variable Cost Amount

1 Raw Material 00% 0 100% 46000
2 Repair & Maintenance 100% 5000 00%
3 Utilities Exp. 30% 14400 70% 33600
4 Rent 100% 0 00% 0
5 Depreciation 100% 50000 00%
6 Salary /Wages Salary 100% 45000 Wages 100% 54000
7 Interest on Fixed 100% 12500 00%
capital
8 Interest on Working 00% 100%
Capital
9 Total 114400 133600

BEP=(1400000)/(230000-133600)=14.52