Business Analysis: An Overview of The Business

BUSINESS ANALYSIS
AN OVERVIEW OF THE BUSINESS
Our business-“Hunar”, a gift manufacturing unit mainly manufactures handicraft items.

Handicraft which is also known as craft work or simply craft, is a type of work where
useful and decorative devices/items are made completely by hand or using only simple
tools. Usually the term is applied to traditional means of making goods. That’s why we
decided to establish a manufacturing unit which manufactures the traditional, trendy and
demanding handicraft items. A brief but sound knowledge of fine arts of two of our
partners encourages us to put a step ahead in this business. Absence of any such
business (gift manufacturing unit) and relatively less requirement of funds gives us a
better opportunity to have a great scope in this business. Besides this, by a survey we
found that consumers of Jharkhand are willing to buy handicraft and decorative items
which reveal our culture – people want traditional touch in their items. Retailers and
wholesalers are also keen to draw their orders from a manufacturing unit or stores
which are nearer to them as it saves their transportation cost and some other
miscellaneous expenses. Seeing the demand we decided to fill the gap which is lacking
in the gift items present in the market. All age group people are interested in buying the
gift and decorative items. Especially the youth because they find gifts the best way to
express their feelings.
Therefore, the large demand also enhances large profit. Business is all about
satisfying customers need at a motive to earn profit. Thus, our business justifies both
the points.
Now, here we present the overview of our business broadly in points wise so that
you get a clear picture of our business.
1
NATURE OF THE BUSINESS
Our business is mainly a gift manufacturing unit (mainly handmade items).Our firm /
enterprise is a partnership firm which is registered under Indian Partnership Act, 1932.
TITLE OF THE ORGANISATION
The title of our business is “HUNAR – that differentiate our work”. The reason
behind this name is that our product and work is totally the outcome of the ART (Hunar)
of our experts. Thus, the name directly spells our work.
PRODUCT
The product range consists of:
• Greeting Cards
• Various types of soft toys like Teddy bears, tweety etc.
• Holiday gifts and decorative items like bells.
• Brass handicrafts
• Both accessories (towel hangers, rods, napkin holders etc.)
• Handmade paper products (bags, photo album, diary, envelops etc)
• Photo frames + Garden metal decorative.
• Sculptures, embroided clothes
• Artificial jewelery, bangles and bracelets.
• Wooden jewellery boxes.
• Decorative masks, animal figures
• Mixed metal artifacts of iron like lamp.
• Flowers and vase
• Paintings (Glass paintings, board paintings, clothes paintings etc
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• Above are the main items which are manufactured in our business.
PURPOSE OF THE BUSINESS
Main purpose of our business is to provide customers a market of handicraft

items which provides a unique quality of Indian tradition and rural work. Beside
this,other purpose are:
 To save our culture
 To maximize the profit
 Employment generation
 To give desire design to our customer
Punch line -“ART WITH HEART”
Brand name “Ehsaas”
3
LOCATION
Our enterprise is divided into the manufacturing unit and the office. The
manufacturing unit is located at Lalpur, near Hotel City Palace and our office is situated
at Purulia Road, near Xavier College of a room of 250 sqft. We have a building there
with a hall of 850sqft owned by our one of the partner. We have considered these two
places for our purpose because:
Significance of the location for the manufacturing unit
 Easy availability of raw material(near to main road)
 Easy availability of power, water, labour, infrastructure
 Sufficient space
 Well established road network
 Near to our office
Significance of the location for the office
 Centrally located
 Easy access for our target customer
 Easy transportation
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COMMON ROOM STORE ROOM FOR
ROOM1
FINISHED GOODS
ROOM2
EXIT GATE
MANAGING OR
ROOM3 CONTROL ROOM
WATER SUPPLY
STORE ROOM FOR RAW
MATERIAL
WASH ROOM
ENTRANCE
5
Fig ; LAYOUT OF OFFICE
6
BIODATA OF ENTREPRENEURS:
Here a brief introduction of all active partners of our business is given:
> Name : DEEPIKA BHARTI
Qualification : BBA Graduate from BIT, Mesra
Strength : Good in finance part
> Name : NATASHA RANA
Strength : Good in Public Relation
> Name : SANJANA JAISWAL
Strength : Good in art work
> Name : TANNAVI SINHA
Strength : Good in art work
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EXECUTIVE SUMMARY
CURRENT ANALYSIS OF PROPOSED BUSINESS:
Economic Trends
The current economic trend of Jharkhand (the state where our business is set up)
provides a favorable opportunity for any new business set up.
Consumer Trends
The target consumers of our business are willing to buy handicrafts or handmade gift
and decorative items for wishing and presenting others and for personal use.
PROFIT PROJECTIONS:
Our business is expected to earn a high profit. The reason behind this expectation is
that the business of same line earns much more than what they invest. Secondly, there
is always a scope of gift items in the market. This section further can be clarified in our
financial section.
REQUIREMENT OF FUNDS:
Our business does not require much funds as the cost of raw material, labour and
manufacturing process is not so high. The total requirement of our projected business is
Rs. 5,00,000 initially. Our total investment will be Rs.6, 60,000.
DEMAND ANALYSIS:
To know with certainty that people will want and buy our products (handicrafts) we do a
market research and demand analysis. E.g. we show our craft on e-bay and the
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checked the auctions ending that day. Most of the auction are for our crafts, shows the
demand for the products.
KEY CHARACTERISTICS OF THE BUSINESS
Following are the key characteristics of our business:
i. Practically feasible (mainly in market and finance sense)
ii. Scope of existence in the market as our survey results that Ranchiites like
handicrafts gift items.
iii. Less fund required.
iv. High profit as investment is much below than the earning.
v. Easy to start as due to favorable feature like requirement of less labor and
finance, small space, easy availability of raw materials etc.
vi. Competitive advantage, as there is no any other gift manufacturing unit in

Ranchi.
SOCIAL AND POLITICAL CONSIDERATIONS:
Social and political factors are favorable to our business concepts, as our work doesn’t
harms the society in any way plus its set up does not require any political formalities.
Instead the government supports us to set such business as it provides an opportunity
to local workers to work and to learn the art of making handicrafts items. This will
improve their living standard as well as popular handmade items which is a good sign
for the society.
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MARKET ANALYSIS
SWOT ANALYSIS
Strength and Weakness are related to internal environment of our business.
Our strength are:
 we are having qualified partners and skilled experts who will carryout the
business
 We provide traditional look of product
Our weaknesses are:
 Our all partners are fresher and are not having any work experience.
 Modern society taste may have adverse effect on demand.
Opportunity and Threats are related to external environment of our business.
Our opportunity is:
 There is an opportunity for our business in market as there is no any such unit
(manufacturing) in Ranchi that provides a wide range of products to its retailer
and wholesalers.
Our threat is:
 The main threat to our business is that it faces a wide range of good competitors
of high level, located at other places like Kolkata, Delhi, Mumbai etc.
10
MARKETING MIX:
Marketing mix consists of 4 P’s of our business. Product, Price, Place and Promotion.
The Product
Our product range consists of various handicrafts and other gift items which are
handmade. Various aspects related to product mix are:
Policies : To enable the product to reach a desired level of

market penetration.
Procedures : Product is made by our experts and sometime it is

demanded.
Times to be offered : We provide order on demand of our customers.
The Price
The element of marketing mix consists of the policies and procedures relating to the
price level, price specification and the price policy.
Price level : Moderate (depending upon product quality and type

of service).
Price Specification : Within the reach of people who buy our products in bulk
i.e., retailers and wholesalers.
Price Policy : The pricing method and strategy of our business

(product) is “COST PLUS METHOD”. Using this
strategy we determine Sales policy of our product as
follows:
Total Cost (FC + VC) + Profit Margin = Selling Price.
11
Place
We distribute our product mainly in Ranchi Market because as in case of manufacturing

unit. The price realized is usually better when the sales are made at the place of
production itself.
Besides there we also supply our products to market near to us like Ramgarh,
Pundag, Barkakana etc.
Our distribution channel is quite simple.It consist of 1-level and 2-level distribution
channel.Thus our distribution channel are:
1. Hunar  Retailer  Customer
2. Hunar  Wholesaler  Retailer  Customer
The main way for distributing our product is roadways.
Promotion
Various promotional means are
 Pamphlets
 Newspaper
 Agents & Personal Contacts
 Products Brochures – It is used to show off samples of our craft or work

including details of how we got started in our craft and art. People have to hear
about and get influenced by our style and are willing to buy our product.
 Business Cards – To hand out at shows, fairs and retail stores.
In short, marketing mix of our business are:
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Target Group : Wholesales & Retail stores
Product : Handicrafts & other hand made gift items and some
services.
Price : Reasonable, use of cost plus method
Promotion : Through ad in newspapers, pamphlets, good branding

and packaging.
Place : Distribution channel – roadways.
CUSTOMER PROFILE
Our real customers are the retailers and wholesalers of gift items situated mainly in the
pose area of Ranchi like Main Road, Lalpur, Kanke etc. These retail shops may be in
any complex or may exist independently. Besides these our target customers are also
the teenagers and people of age between 9 to 25 years who care mainly the students of
school colleges for the assignment purpose.
Target Market
Our target markets and customers are:
For Product
 Retailers and wholesalers of gift items
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HOW WE SELL OUR PRODUCTS
We sell our products as follows:
Craft fares and Art Fairs: We sell our products at craft and art fairs. People expect to
see handicrafts at these types of events. For this we set up an arts and crafts calendar
to keep track of all the events. This type of event provide us a ready market of potential
buyers; not just the public, also retailers with their own booths. Earlier we visit to smaller
fairs.
Wholesalers: We can also supply our products to wholesalers. They thus also help us
to sell our products.
Retails Stores: We ask the retailers about their purchasing policy and how they
typically pay. If they agree we place some sample at the shop. If they like our products
they may want to tie us into a purchasing contract. In earlier days of our business we
put our few products also in several smaller stores where our product not getting lost in
the crowd and get customer attraction.
Other Related Web sites: The internet can be a great way to sell our product. We give
ad of our product on various websites and eBay and get order from its users. This can
increase our sells without extra efforts.
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MARKETING STRATEGY (FOR PRODUCT)
Our marketing strategy is ‘Niche Marketing’. That is we keep stock of raw

material in quite heavy amount. We invest our money on stock so we can manufacture
the product without any hindrance and make the supplies on time.
OUR KEY OBJECTIVE FOR MARKETING SUCCESS
The key objective for marketing our craft product business is our reputation for
high quality work. By consistently producing fine craft (gift items) that are exciting and
innovative, our reputation can serve as our word-of-month advertising.
Thus, our key is
“To provide quality and trendy product.
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MARKET RESEARCH : DEMAND AND SUPPLY
A. Sampling Technique
We use the simple random technique to know the market scope of our product. For
which we selected a sample size of 40 people constituting the target group from the
population of Ranchi. The percentage remains same for the consumer as well as of the
retailers. There people were then interview through the open-ended questionnaire. The
outcome of which shows the favorable opportunity for our product.
We prepare two set of questionnaire. One from customer point of view and
another from retailer point of view.
ANALYSIS OF DATA
From ultimate customer point of view
1. Like to buy gifts, decorative items, cards, for loving ones of personal use
20%
80%
Yes No
2. Type of Gifts like to buy
16
15%
15% 45%
25%
Soft Toys Cards Decorative Items Other gift items
3. Amount Spent on Gifts (as per age group)
70
60
50
40
Spending(in %)
30
20
10
0
15-25 25-35 35-45
Age
4. Elements lacking in product
17
45
40
35
Response (in%)
30
25
20
15
10
5
0
Price Range of Quality
Product
From Retailers point of view
1. Sell of gift items in Ranchi
17%
83%
Good Very Good
2. Source of gift items
18
15%
85%
Outside Kolkata, Mumbai, Delhi Local
3. Willingness to take consignment from a manufacturing unit established in

Ranchi
13%
87%
Yes No
4. Frequency of order for the product
19
20
15
10
0
2 -3 3 -4 4 -5
Month
6. Price range of product demanded
100
80
60
40
20
0
50 - 100 100 - 150 150 - 200 200 - 250 250 - 300 300- 350 350 -
More
C. Placing the product as sample
We placed a sample of our product to some retail shops, fairs and exhibitions
which shows a favourable response to our product that mean there is a scope of
our business.
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TECHNICAL ASPECT
SOURCE OF AVAILABILITY:
Equipment: Some of loose tools and other miscellaneous equipments are available in
any hardware retail store or in daily market near Main Road, Ranchi.
Raw Material Availability: Our different products require different types of raw material
and inputs. Raw material like fur, pearls, lashes, ice cream sticks etc are available at
Sai Market, Upper Bazaar, Ranchi. Some other inputs like metal, iron ore, soil, bell etc.
are available at various retail and wholesale store of Ranchi at different place of Ranchi.
21
MANAGERIAL ASPECTS
Since, we all are active partners, top level responsibilities and overall
management is under our guidance. Each and every partners is going to handle
different aspects of project. One of us will handle the financial aspect, the other will look
over marketing field and the rest of two will be handling the production and the general
administrative aspect including HR.
Beside these the overall management is carried out with the coordination of all
four of us.
STAFF
We employ three experts designated as “Supervisor” and 9 workers working under

them, besides this we will be employing one sweeper and a security guard. With the
expansion of our business we increase the number of staff working with us. As the need
increases, especially at the time of event and puja pandal’s decoration, we may hire
some indirect local labors.
DUTIES AND RESPONSIBILITIES OF STAFFS
Each of the partner will be handling these areas- office management, finance
management, production and material handling and marketing.
Each supervisor has given three workers working under them. At the beginning of the
month we give them a target (quantity of finished product we want) with specifying types
and quality of output, to be produced.
KEY FACTOR:
To promote the workers to complete the target on time we motivate and provide
incentives to them.
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FINANCIAL ANALYSIS
PRESENT STATUS
All four partners of our business are fresh graduates and not have much money to
invest in the business. So, the total capital of our business constitutes of some money
invest by us and rest by taking a bank loan.
MEANS OF FINANCE
Sources we use for our finance requirements are:-
* Equity capital : Rs 2, 00,000
* Bank Loan : Rs 4, 00,000
* Subsidy (15%) : Rs 60,000
All four partners of business contributes Rs. 50,000 each lead to total of Rs. 2 lakhs.
The rest amount is arranged by taking the benefits of a scheme of PMEGP,(from
KVIC).Under this scheme SBI,Small Medium Enterprise,City Credit Centre,Ranchi
provide us a term loan of amount Rs. 4,00,000 and a subsidy of Rs 60,000 at 11%
interest rate for 3 to 5 years We invest Rs. 4,00,000 initially in our business and save
Rs. 2,60,000 in our joint bank account in SBI,Lalpur Branch as saving which is to be
use in the business at the time of any unfavorable situation or any extra need in future
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.
INCOME AND EXPENDITURE PROJECTION
EXPENDITURE PROJECTION
Product & Services
Total Investment : 6,60,000.00
Initial investment : 5,00,000.00
Initial Investment
Fixed Cost Operating Cost Miscellaneous Stock

(Rs. 3,24,000) (Rs. 70,000) (Rs. 21,000) (Rs. 85,000)
I. Fixed Expenditure (Rs. 3,24,000)
1. Packing and forwarding charges
2. Security money for building
3. Cost of tools
4. Cost of office equipments (Furniture, computer, stationery etc)
II. Operating Cost (Rs. 70,000)
1. Office Rent
2. Bills
3. Maintenance
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4. Transportation etc.
III. Other items of expenditure (Rs. 21,000)
1. Power charges
2. Advertising and traveling
3. Telephone charges
4. Commission to distributors or agents
IV. Stock (Rs. 85,000)
INCOME PROJECTION
As we supply our output (product) to dealers or retailers rather than selling them by us,
our income varies with the order given to us by various retail stores. The payment of bill
is depend on mutual negotiation and quantity of items supplied.
After observation of business of same line and analyzing our capacity we expect
our income of Rs. 1,00,000 per month approx.
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FINANCIAL STATEMENTS FOR FIRST THREE YEARS
WORKING CAPITAL REQUIREMENT
Sl. Particulars Period Amount (2010)

No. Days
( in Rs.)
1 Total current asset 365 5,18,000.00
2 Less: Creditors 365 18,000.00
3 Net Current Asset (1 – 2) 5,00,000
4 Margin for working capital (25% of 5,00,000) 1,25,000
5 Max. permissible bank finance or working 3,75,000

capital requirement (W.C. Loan) (3 – 4)
Comment : As our working capital requirement figure shows that we need Rs.
3,75,000 in first year as working capital. That’s why we apply for a loan of Rs. 4,00,000
to the bank
Project Cost
1. Office Rent : Rs. 7,500
2. Current Assets
Loose tools: 10,000
Stocks: 25,000 Rs. 35,000
3. Fixed expenditure : Rs. 43,000
4. Administration Cost : Rs. 10,000
5. Margin money for W/C : Rs. 50,000
6. Staff Salary : Rs. 1, 53,000
Total : Rs. 2,98,500
(All the above mentioned figures are for first three months)
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Sl. Particulars Period Amount(2011)

No. Days
( in Rs.)
1 Total current asset 365 11,15,760
2 Less: Creditors 365 00.00
3 Net Current Asset (1 – 2) 11,15,760
4 Margin for working capital (25%of 11,15,760) 55,788
5 Max. permissible bank finance or working 10,59,972

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Sl. Particulars Period Amount (2012)

No. Days
(in Rs.)
1 Total current asset 365 2565947.60
2 Less: Creditors 365 00.00
3 Net Current Asset (1 – 2) 2565947.60
4 Margi for working capital(25%of 2565947.60) 641486.90
5 Max. permissible bank finance or working 19244607.70

28
TRADING & PROFIT AND LOSS A/C
(for the year ending 31st March 2010)
Dr. Cr.
Particulars Amount Particulars Amount
(in Rs.) (in Rs.)
To Purchase 3,60,000 By Sales 12,00,000
To Gross Profit c/d 9,25,000 By Closing Stock 85,000

(Transferred to Profit &
Loss A/c.)
12,85,000 12,85,000
To Salaries 6,12,000 By Gross profit b/d 9,25,000
To Telephone Expenses 24,000
To Electricity Expenses 12,000
To General Expenses 20,000
To Maintenance Expenses 20,000
To Rent 30,000
To Commission to agent 10,000
To Interest (@11%) 44,000
To Provision for Tax 30,000
To Net Profit C/d 1,43,000
(Transfer to Capital A/c.)
9,25,000 9,25,000
29
TRADING & PROFIT AND LOSS A/C
(for the year ending 31st March 2011)
Dr. Cr.
(in Rs.) (in Rs.)
To Opening Stock 85,000 By Sales 28,80,000
To Purchase (40,000 x 12) 5,40,000
To Gross Profit C/D 22,55,000

Loss A/c.)
28,80,000 28,80,000
To Rent 32,400
To Interest (@11%) 33,000
To Provision for Tax 60,840
To Net Profit c/d(Transfer 12,80,760

to capital a/c)
22,55,000 22,55,000
30
TRADING & PROFIT & LOSS A/C
(For the year ending 31st March 2012)
Dr. Cr.
(in Rs.) (in Rs.)
To Purchases 7,20,000 By Sales

54,00,000
53,75,000
Less: Sales Return
To Gross Profit c/d 46,55,000 25000
Loss A/c.)
53,75,000 53,75,000
To Rent 36,000
To Interest (@11%) 5,47,052.40
To Provision for tax 1,55,000
To Net Profit C/d 28,65,947.60
(Transfer to Capital A/c.)
53,75,000 53,75,000
31
PROJECTED BALANCE SHEET
(for the year ending 31st March, 2010)
LIABILITIES 2010 (Rs.) ASSETS 2010 (Rs.)

Equity Capital 2,00,000 Fixed Asset :-
Less: Drawing 40,000 1,60,000 Gross Block 2,03,000
Profit & Loss A/c 1,43,000 Current Asset :

Cash in Hand 50,000
Loan from Bank 4,00,000 Cast at Bank 1,50,000
Stock 85,000
Trade Creditors 18,000 Debtors 85,000
Bill’s Receivable 1,00,000
Advances 48,000
7,21,000 7,21,000
32

Less: Drawing 96,000 1,60,000 Gross Block 7,25,000
Profit & Loss A/c 12,80,760 Current Asset :

Cash in Hand 2,15,000
Loan from Bank 4,00,000 Cast at Bank 5,50,000
Stock 55,000
Debtors 85,000
Bill’s Receivable 1,12,760
Advances 48,000
Miscellaneous 50,000
18,40,760 18,40,760
33

Less: Drawing 1,00,000 21,00,000.00 Gross Block 8,00,000.00
Profit & Loss A/c 8,65,947.60 Current Asset :

Cash in Hand 5,15,000.00
Loan from Bank 4,00,000.00 Cast at Bank 15,50,000.00
Stock 95,000.00
Debtors 85,000.00
Bill’s Receivable 3,12,760.00
Advances 13,187.60
Miscellaneous 80,000.00
33,65,947.60 33,65,947.60
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ACCOUNTING RATIOS
Statement Showing The Different Ratios
ACCOUNTING RATIO 2010 2011 2012
1. GROSS PROFIT RATIO 77.08% 78.30% 86.60%
2. NET PROFIT RATIO 11.92% 44.47% 53.32%
3. PROPRITORY RATIO 0.28% 0.22% 0.62%
4. DEBT EQUIT RATIO 2:1 2:1 0.19
5. TOTAL ASSETS TO DEBT 1.80 4.60 8.41
RATIO
6. CAPITAL EMPLOYED 1.82 4.33 2.20
TURNOVER RATIO
7. WORKING CAPITAL 2.4 2.6 2.10
TURNOVER
8. INTEREST COVERAGE 4.93 28.14 6.62
RATIO
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AVERAGE DSCR CALCULATION
Sl.No. Particulars 1st 2nd 3rd
1. Profit After Tax 143000 1280760 2865947.60
2. Depreciation 10000 20000 31282.00
3. Interest on FCL 44000 33000 22000.00
4. Cash Accruals(A) 197000 1333760 2919229.60
5. Repayment of FCL 100000 100000 100000.00
6. Interest on FCL 44000 33000 22000.00
7. Total Payment(B) 144000 133000 122000.00
8. DSCR(A/B) 1.3 10.02 23.9
AVERAGE DSCR= (1.3+10.02+23.9)/3=11.74
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BREAK EVEN ANALYSIS as on 31st March,2010
PARTICULARS AMOUNT(in Rs.)
A. Variable Cost:
Raw materials 3,60,000
Utilities 12,000
Total: 3,72,000
B. SEMI VARIABLE/FIXED COST:
Salary 6,12,000
Maintenance 20,000
Depreciation 10,000
Interest on Term Loan 44,000
Other working expenses 10,000
Total: 6,96,000
C. CONTRIBUTION:
Sales 12,00,000
Less:variable cost 3,72,000
Total: 8,28,000
D. B.E.P. as % of installed capacity 84.05%
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A. Variable Cost:
Utilities 36,000
Total: 5,76,000
Salary 7,56,000
Maintenance 20,000
Depreciation 20,000
Total: 8,59,000
C. CONTRIBUTION:
Sales 28,80,000
Total: 23,04,000
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A. Variable Cost:
Utilities 84,000
Total: 8,04,000
Salary 15,60,000
Maintenance 40,000
Depreciation 31,282
Total: 17,28,282
C. CONTRIBUTION:
Sales 53,75,000
Total: 45,71,000
39
40
41
42
PAY BACK PERIOD
BASIS : Profit after tax
P.C. : Rs.11, 94,000
Year Profit after tax Depreciation Annual cash inflow Cumulative
1. 143000 10000 153000 153000
2. 1280 20000 1300760

1453760
3. 2865947.60 31282 2897229.60

4350989.60
OUR PAY BACK PERIOD IS: 1 Year 2 months 9 days
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SENSITIVE ANALYSIS RESULTS
Sl. No. Criteria ADSCR Pay Back Period
1. 10% Increase in raw material 11.1 1yr,10mth,3days
2. 10%decrease in sales price 10.4 1yr,9mth,2days
3. 10%increase in salaries 11.4 1yr,2mth,9days
4. Without any change in 11.4 1yr,2mth,9days
above parameter
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ANALYSIS & INTERPRETATION OF FEASIBILITY STUDY
It is an exercise whereby an establishing enterprise makes an objective and

independent assessment of various aspects of an investment proposition to arrive at the
financing decision. These exercises are basically aimed at determining the viability of
the project and sometimes reshaping the project so as to upgrade its viability.
1. Market / Commercial Feasibility
The overall feasibility of the project depends heavy on commercial / market

feasibility.
(i) Demand for the product: We have done a market survey to estimate the demand
for the products offered / made by us. The responses showed satisfactory demand
for the product. The reason being our quality and uniqueness of providing mainly
handicrafts gifts items, which is still liked by all range of people. While conducting
the market survey 75% of retailers (our main target market) of our sample
population showed interest in taking order from us because it reduce their
transportation cost. Generally every retail shops of gift items take their stock from
either Kolkata, Delhi or Mumbai which is a costly affair. This result shows that we
have huge market potential to tap.
(ii) Supply position for the product : We will have a regular supply or consignment
or order that we take from retailers and on time. For producing products on a
regular basis we keep a reasonable level of inventory every time so we can
achieve the target production lead to good supply position. This helps in building
goodwill for our business.
(iii) Distribution Channel: Our distribution channel is quite complicated. It involves too
many mediaries. It comprise of retailers, customers, Wholesales and us.
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(iv) Pricing of the product: Fixing / setting price of the product is a crucial factor.
That’s why while fixing the prices of the products we have taken special care, as it
has direct impact on the commercial feasibility of our project. So, looking at our
requirement we have adopted the cost pricing method.
(v) Government Policies: Proper care should be taken that the legal requirements
laid down by the Government is duly met.
Keeping in views the above mentioned points we can say that our project
is commercially feasible.
2. Social Cost Benefit Analysis
Every project imposes certain cost to the society and produces certain
benefit, so does our project. As our project aims at producing special and
traditional handicrafts gifts items so this will give a boost to promotion and
development of several local art and culture. Handicraft and handloom work is a
traditional and cultural part of our country since age. That’s why government also
helps and encourage to such concept as it gives boost to Laghu Kutir Udyog.
3. Legal Aspects
i. Labour License
ii. Registration Certificate of partnership under Indian Partnership Act, 1932.
iii. Tax will be paid as per the regulation of Income Tax.
4. Economic viability
The economic aspect of appraisal is fundamental as they logically precede

all other aspects. Since our organization ‘HUNAR’ is a very small venture relative
to national economy so, we expect a minimal contribution from our side.
5. Financial Feasibility
46
The financial analysis is the basic tool to judge whether the project is
viable in financial and practical terms or not. In the financial viability, we found out
that proposed project is meeting the following aspects:-
i) Less investment required which is practically possible for new

entrepreneurs;
ii) Generate additional revenue from services offered by us to meet the cost
of the equity and working capital;
iii) Repayment of debt with the required rate of interest on time;
iv) Meeting the break-even point after selling 11,166 units of our product.
v) Raising finance to meet the investment required for the project way of
retained earning on time.
vi) Generating a respectable amount of profit on the venture for the

entrepreneurs.
vii) Generating adequate revenue so as to meet any contingency

requirements.
viii) Generate revenue to maintain the required debt equity ratio. Our debt
equity ratio is:
Debt Equity Ratio = Debt / Equity
= 4, 00, 000 / 200,000 = 2:1
Thus, our debt equity ratio i.e. 2:1 is acceptable as it is idle debt equity ratio for any
business.
Thus, analyzing all aspects of our business, we can say that our project is feasibly
sound.
47
BIOBLIOGRAPHY
Books
 P.Chandra, Project
 I.M. Panday, Financial Management
 Philip Kotler, Marketing Management
 Vasant Desai, Dynamics of Enterpreneurial Development
Websites
 www.google.com
 Wikepedia.com
 www.kvic.com
48
APPENDIX
QUESTIONNAIRE
(From ultimate customer point view)
• Did you buy any gifts, decorative items, cards for your loving ones and for
personal use?
• What type of gifts would you like to buy?
• How much of amount generally you want to spent on a gift?
• What attract you to enter into any gift shop?
• What you think is lacking in gift products available in your locality or Ranchi
market?
• Did you like handicrafts items?
QUESTIONNAIRE
(From retailer’s point of view)
• Is there good position for gift items in Ranchi?
• From where you drew the goods / product?
• Are you ready to take consignments from a manufacturing unit established in

Ranchi?
49
• How often you give an order for the product and generally in what quantity?
• Which price range products have good sell?
• What type of product have great sell?
50

Business Analysis: An Overview of The Business

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BUSINESS ANALYSIS

AN OVERVIEW OF THE BUSINESS

Our business-“Hunar”, a gift manufacturing unit mainly manufactures handicraft items.

TITLE OF THE ORGANISATION

The product range consists of:

• Various types of soft toys like Teddy bears, tweety etc.

• Holiday gifts and decorative items like bells.

• Both accessories (towel hangers, rods, napkin holders etc.)

• Handmade paper products (bags, photo album, diary, envelops etc)

• Photo frames + Garden metal decorative.

• Sculptures, embroided clothes

• Artificial jewelery, bangles and bracelets.

• Wooden jewellery boxes.

• Decorative masks, animal figures

• Mixed metal artifacts of iron like lamp.

• Flowers and vase

• Paintings (Glass paintings, board paintings, clothes paintings etc

PURPOSE OF THE BUSINESS

Main purpose of our business is to provide customers a market of handicraft

 To save our culture

 To maximize the profit

 To give desire design to our customer

Punch line -“ART WITH HEART”

Brand name “Ehsaas”

Significance of the location for the manufacturing unit

 Easy availability of raw material(near to main road)

 Easy availability of power, water, labour, infrastructure

 Well established road network

 Near to our office

Significance of the location for the office

 Easy access for our target customer

Here a brief introduction of all active partners of our business is given:

> Name : DEEPIKA BHARTI

Qualification : BBA Graduate from BIT, Mesra

Strength : Good in finance part

> Name : NATASHA RANA

Qualification : BBA Graduate from BIT, Mesra

Strength : Good in Public Relation

> Name : SANJANA JAISWAL

Qualification : BBA Graduate from BIT, Mesra

Strength : Good in art work

> Name : TANNAVI SINHA

Qualification : BBA Graduate from BIT, Mesra

Strength : Good in art work

CURRENT ANALYSIS OF PROPOSED BUSINESS:

KEY CHARACTERISTICS OF THE BUSINESS

Following are the key characteristics of our business:

i. Practically feasible (mainly in market and finance sense)

iii. Less fund required.

iv. High profit as investment is much below than the earning.

vi. Competitive advantage, as there is no any other gift manufacturing unit in

SOCIAL AND POLITICAL CONSIDERATIONS:

Strength and Weakness are related to internal environment of our business.

Our strength are:

 We provide traditional look of product

Our weaknesses are:

 Modern society taste may have adverse effect on demand.

Opportunity and Threats are related to external environment of our business.

Our opportunity is:

Our threat is:

Policies : To enable the product to reach a desired level of

Procedures : Product is made by our experts and sometime it is