Business Plan of 'Ahar'

Business Plan on Replacing fast foods by 'Bangladehsi Pithas' Our business name – AHAR Course Name – Marketing Management Course No. - BA-2211

Prepared forSharif Mohammad Khan Assistant Professor

Prepared byName

ID

Abdur Rakib Akon

070305

Reza Al Saad

070312

Md. Masrul Mollah

070314

Md. Nazmul Huda

070323

2nd Year, 2nd Term BBA Program

Date of Submission: January 26, 2008

Business Administration Discipline Khulna University

Businesses Plan of 'Ahar'

Owners:

Abdur Rakib Akon

Md. Nazmul Huda

Md. Masrul Mollah

Reza Al Saad

Date of publication: January 26, 2008

Index Topic

Page

1. Executive Summary

1

2. Business Summary

2

2.1 Business Information

2

2.2 Our Operational Activities

2

2.3 The Market we will serve

3

2.4 The Industry

3

2.5 Benefits will be added by us

3

3. Market Situation Analysis

4

3.1 Our Strengths

4

3.2 Our weaknesses

4

3.3 Our Opportunities

5

3.4 Our Threats

5

4. Competitiveness Analysis

6

4.1 Competitive rivalry within an industry

6

4.2 Threat of new entrants

6

4.3 Threat of substitute product

7

4.4 Threats of buyers growing bargaining power

7

4.5 Threats of suppliers growing bargaining power

7

5. Mission Statements

8

6. Business Action Plans

9

6.1 Product Lines

9

6.2 Supply Chain

9

6.3 Human Resource

10

6.4 Marketing & Promotion

10

6.5 Research & Development

11

7. Management 7.1 Management Body

12 12

7.2 Management Structure 8. Financial Forecasting

13 14

8.1 Expenditures

14

8.2 Investments & Revenues

15

9. Exit Strategy

16

10. Appendix

17

References

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1.

Executive Summary

Fast foods are very much popular all over the world because of less time consuming and more taste. It is is also favorite among the people of our country. But because of these junk foods we are forgetting our own foods pithas, singaras, samichas etc. types of our Bangladeshi fast foods. So with this initiative we came forward to make a business plan to replace the ongoing fast foods by our Bangladeshi pithas. We have named our business 'Ahar'. We named this business supporting our Bangladeshi perspective and we think this will be a perfect name for this type of product. Our idea is to serve various type of pithas that will make people move to our Bangladeshi foods especially to misti pitha and jhal pithas. We think there is a huge field to make a market of this type of foods in our country. We have determined some factors that will help us generate some revnues from the beginning of this business launch. And we also have defined our competitors strategies so that we can compete with them. We have analyzed our SWOT and defined in which way we will do our business. We have created a great opportunity for investors who seeks new innovative business ideas and plans. We have determined our break even point within one year. We have calculated in which year we will have our revenue in what amount. And we projected our revenue will be double up within five years if we can work in our way. Our objective is to provide a better quality food habit and to move people from junk tastes to a healthy taste. We want to see that people doesn't fear about heart diseases and diabetics type sufferings. We are planning to reach our break even point within one year from our launch and to earn a double revenue within three years.

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2.

Business Summary

2.1 Business Information Business Name

: Ahar

Business Location/s

: Dhaka, Khulna, Chittagong

Contact

: +8801714117014, +880191989559

Owner/s

: Abdur Rakib Akon, Md. Nazmul Huda, Md. Masrul Mollah, Reza Al Saad

Contact Person

Abdur Rakib Akon Chief Executive Officer Holding No. - 123 Road No. - 17 Nirala Residential Area Khulna – 9100 Bangladesh Phone: +880191989559 E-mail: [email protected]

Business Structure

: Partnership Business

Business Concept

: Bangladeshi Pitha Shop

Mission Statement

: To replace fast foods by pithas

Md. Nazmul Huda Senior Executive Officer Holding No. - 128 West Tootpara Main Road Khulna – 9100 Bangladesh Phone: +8801714117014 E-mail: [email protected]

2.2 Our Operational Activities We will firstly start our operations from 3 regions of Bangladesh – Dhaka, Khulna and Chittagong. If we can earn a satisfactory amount of money we wish we will also launch our operations in Sylhet and Comilla. We will mainly serve three main types of products. Our main concerns will be Sweet Pithas and Chilly Pithas. But we will also serve some Spicy pithas and Deshi Fluid items. We also included a price menu in our detailed section. We already said that we want to make a share of fast food market. We think people will move their tastes from junk fast foods to healthy and less cholesterol containing deshi pithas. Because mosr of the pithas are made from rice or flours and other natural resources those come directly from nature. So our promotional programs will only say one message – 'eat better, live longer'. Our financial support will be maintained by us. We have a wish to make this business in corporate environment if it runs well. As far we have collected more than 45 million among us to launch this business. And if we need any financial support we will consider to take loans from bank/s but now we think we are in a flexible position to run this business from financial point of view. 2

2.3 The market we will serve We have the uniqueness from the side we are launching the products those were inbound to home but we are releasing those items as professional business products. There are some businesses with this type product but they doesn't have such type of objectives or goals like a professional business planning. So, we are confident that we will capture one type of monopolistic market from pitha business. But there is a area where people searches fast foods. On that area we will have to compete with other businesses. We could define some of our competitor sector which we will have to compete with. Conventional Italian and American fast food shops will be our main competitors. And also some other type of restaurants those serves middle and lower class people will be in our concern. And students, employees, daters, etc. type of people will be attracted to our product lines we believe. But among the fast food industry there is also a gap to pull through. We must try to attract the customers those go for fast foods regularly, but there is a group those don't go for fast food regularly or never go there for health safety from junks. But we will serve low cholesterol foods. So, this is one of our advantages. And there is a group of people of lower middle class and lower class people as a potential customer segment for us. Because normally conventional fast foods are very costly that cannot be affordable by those people. But our items will be so lower cost bearing so that everybody can get chance to have a taste of our food items. 2.4 The industry Fast food and restaurant industry is a very competitive area in the perspective of Bangladesh. But we are adding a new product line into this industry. So, we think at the first step we will not have to face so much complications to catch maturity stage of our products. Our main strength is that there is not so bigger competitor from the view of pitha business. And we think we are financially strong to run such type of business in this market. Now a days many diversified services in fast food industry is being added regularly. And we are also launching with diversified product lines. So we think we can easily go to a top position in the fast food market. 2.5 Benefits will be added by us We think we are not here to do business for us. We have a responsibility to our society. Inspiring by this we have thought about this new and productive business. Our business will certainly create some opportunities for employment. Taxes will be a adding to our govt. revenue. As we have a long term sustainability we think we will be able to make more people added to our business that will work as a social well-being. 3

3.

Market Situation Analysis

Every business has its own features on which the chances to be successful depends. For measuring the potentiality and the risk of a new business we need to make the proper use SWOT analysis test. By this test we can evaluate the strength, weakness, opportunity and threat. We are starting with the strength of our plan. 3.1 Our Strengths: We are going to deal with the seasonal Bangladeshi food. Which is in our language known as 'Pitha'. Traditionally we have many seasonal pitha. We have pitha in winter season, we have pitha in summer and also in spring. The main advantages of our plan can be categorized in two ways. One is cost and another is health consciousness. In seasonal pithas normally we use ingredients which are achievable from our environment. Such as most of the pithas are made of paddy, coconut, flour, sugar, cow milk which are not only healthy but also very cheap. In comparison to the ingredients used in case of the fast food. Because in fast food most of the cases we need to use chicken, mutton, beef, butter, cheese etc. which are very costly and causes harm to our health. Because those ingredients are liable for the increasing rate of diabetics, high blood pressure and heart diseases. As we know customers are always price sensitive, so we have a huge chance to gather the big portion of the market within a short period of time. Because we are offering food of diversified taste with a cheap price. Those food are also very much healthy. Our conventional seasonal foods are always very much popular among the people. But now a days usually they do not take those foods. Because those are not easily found and cannot be made easily. And also specialized skill is needed for making these foods. That shows that people are always fond of having those seasonal pithas but they have not the proper source. And they haven't enough time and skill to make it. As a result we can make those pithas for them and present them in a favorable place that will be certainly popular among the people. Why people prefer fast food? Because it is ready made, it is dry and for eating those foods huge arrangements is not needed. No bowl or spoon is not mandatory. All those facilities we will provide in Bangladeshi seasonal food Ahar. We will also add some innovative features in our conventional seasonal pithas those will certainly serve the customers with different tastes those they were always looking for. 3.2 Our Weaknesses: In this business we cannot identify lots of weakness. But we have found a few such as – those seasonal foods are available for a specific time in a year. Those pithas which are available in winter cannot be made in summer. But those ingredients will not be available in that time. We cannot provide our best effort through the whole year.

4

Another weakness is that s our ingredients come from natural resources those are not available in urban areas. We have to get those things from rural or sub-rural areas. For this we need to have strong chain of suppliers. But for maintaining those suppliers and also because of the distance we have to spend a lot that will certainly minimize the profit. Diversity of taste can be weakness in a sense. Because in our seasonal food there is lack of chilly foods. So in this case we need to be a little bit innovative. 3.3 Our Opportunities: We have huge opportunities in this business. Because our people are very fond of those conventional food items, but those are not available ready made. Sometimes they get those pithas, but the sources are not very healthy. They have not any brand name in this field, which name can assure them about the standard and the nutrition of the food. So 'Ahar' is going to be the brand name of our seasonal pitha. Nowadays people are much more health conscious, so many of them are trying to leave those fast food with high cholesterol, but they have no substitute product to take. Ahar is going to be that replacement. And pithas aren't junk. So people will get more attraction to these pithas. 3.4 Our Threats: We are going to enter into a highly competitive segment of food market. We will have to face a lot of threats. Our major competitors will be the fast food shops. They already have diversified product line and also they are capturing the major portion of the market. So huge time, money, people, and efforts are needed to gain their market share. Our other threat can come from from bakeries, pastry shops and a bit from restaurants. Bakeries and pastry shops are producing and serving some food items that made the need of the customer whom we have targeted. Restaurants are dealing with the customers with limited earning. Middle class and lower class people usually take food from restaurants. So a big portion of our target market is engaged there. So all those things are proved to be the threat for that new business.

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4.

Competitiveness Analysis

We have analyzed the current market situation by the five factor model of Michael Porter. In this model there are five forces. By those forces we have identified the competitiveness of the target market. It is the renowned process all over the world to evaluate the appropriateness to enter into a business. 4.1 Competitive rivalry within an industry: Within this market we have some strong existing competitors. Such as- Pizza Hut, KFC, Domino's pizza, Sizzle etc. But as we are going to start with the conventional local food we don't have such type of competitor. It is a stable business because it is related with appetite. So it is appropriate business to enter. Exit barrier is also low, so certainly it is an attractive segment of market to choose.

Figure: Michael Porter's Five Factor Model to measure competitiveness 4.2 Threat of new entrants: Threats of new entrants for a business is always true. So we have always risk of those new entrants. For this business entry barrier is not very high, as a result in that sense it is an 6

unattractive segment. In food business new entrants are always available, but if we can build our's as a brand name and gain the major portion of the market share we will certainly be able to avoid the threat of the new entrants. 4.3 Threat of substitute product: We are going to compete with fast food. We are a food item with a specific taste, in this field we don't have real substitute products. Sweet industry such as our 'Dairy industry' can be substitute product. But as those are not our real substitute product, it is certainly an attractive market.

4.4 Threats of buyers growing bargaining power: Our buyers would not bargain with the price because we are offering very low price. As we are starting from a low price it would certainly fulfill the customer demand, because customers are always price sensitive. It is also avoidable because the switching cost of our product would be much more higher. Our product would be cheaper than the fast food items. 4.5 Threats of suppliers growing bargaining power: We are going to launch a new trend of the food business. So the suppliers of that field are not so much concentrated and organized. We emphasize on collecting raw materials from diversified areas. We will collect specific ingredients from specific places. As a result our suppliers are widened through the whole country. So low bargaining power of the suppliers make the target market so much attractive.

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5.

Mission Statement

Our business plan is created through some motives. Here we tried to explain our missions and objectives. Product Mission – To serve better quality and taste of home through a variety of pithas. Community Mission – Providing a community service through serving dehsi cultures and tastes. Economic Mission - Operate and grow at a profitable rate through sound economic decisions. Our objective is to capture the market share and replace a great portion of conventional fast food items by serving Bangladeshi pithas. Our goal is a little bit economical. We are forwarding to reach our break even point within one year and if we can manage to double up our revenue within 3 years we have a plan to extend our business. Our visionary view of this business is that we don't want to see any body's panic because of bad food habit. We want to make people having a good habit in eating.

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6.

Business Action Plan

Here we have come to our business actions plans by which we will fulfill our objectives. We have prepared some segments those will make our works maintained and simplified. We have interpreted some department where different group of people will work. But at first we should be clear about our services. Our services will include: 1. 2. 3. 4.

Four types of product lines including pithas Chain van shop for lower class people, school, college, universities etc. Restaurant services Home delivery services

Then we can go through our main plan. 6.1 Product Lines: We have defined four product lines for our business. 1. Sweet Pithas: This product line will include most of our items. The pithas are sweet will be included under this line. i. e. - Vapa Pitha, Pati-Shapta Pitha, Ras Chitai Pitha etc. 2. Chilly Pithas: We will also some chilly pithas and dry pithas like Chitai Pitha, Jhal Pooli Pitha etc. etc. will be included under this product line. 3. Spicy Pithas: Fried pithas like Vaja Pooli Pitha, Pan Pitha etc type of pithas will be included under this category instead of 'sweet pithas'. 4. Deshi Fluids: We will arrange some drink items besides our pithas like coconut water, juices made by deshi reciepies etc. We will have our own menu items. One sample menu we have included in the appendix menu. 6.2 Supply Chain: We should build a strong chain of suppliers who can supply us the ingredients we need to make those seasonal pithas. As our ingredients are very much natural we have to depend a lot on the rural areas. Because those ingredients are not available in the urban areas. So for the availability of the ingredients we must have a strong and skilled line of suppliers. Those products are highly perishable. So transportation facilities and timely distribution of those item should be ensured. That's why skilled suppliers are needed. We have arranged some people fixed who have contracts with us to supply our materials. Here is given a list1. Mujib Biswas from Noapara will supply us flour from his flour mill. 9

2. Rahima Begum from Naoga will supply us milk from her own firm – 'Adarsha Dairy Firm' 3. We will get paddy supply from 'Sukendra Samabay Firm' from Rajshahi. 4. Mizan Gazi from Bagerhat will supply us date juice in winter season. We haven't determined which others will serve other different materials but we think we will manage them within a very short time. We have two trucks of our friends for transportation in hire. 6.3 Human Resource: As we can't imagine a business without materials or inventories, we can't imagine it without human resource. So we also made our human resource department to find out some right persons for our business. 1. Cook: We will find out some cooks through maybe some local competition or cook hunt. But we must employ creative and innovative cooks. 2. Waiter: We have to employ waiters and waitresses for our restaurant service. 3. Street seller: We will need some street sellers who will sell our food items from our chain van shops. 4. Delivery boy: For home delivery services we will need some delivery boys. 6.4 Marketing & Promotion: Marketing and promotion department is a vital part of any business organization. We will have some followings programs to promote our service. 1. Media Coverage: We will cover medias like newspapers, TV medias, and radio medias to advertise ourselves. 2. Poster: Poster works will be limited but it will also work as our advertisement in some special events. Like in some special events we will make posters. 3. Health Conscious Advertisement: We will promote our products as those are healthier than any other fast foods. 4. SMS Service: We will advertise our business through promotional SMSs by collaborating with the mobile operators. 5. Festival Discount: We will give special discounts in some special festivals. 6. Discount Leaflet: We will provide discount leaflets at the beginning stage of our business. 7. Sponsorship Discount: We will provide discounts on the tickets of various events. 8. Food Sponsorship: We will sponsor various national and at a later stage also international events which work as advertisement of our business. With more of this we will have some regular customer packages for some special segments. Such as10

1. 2. 3. 4.

A discount Package for newly married couples (marriage not before 6 months) Discount card for regular and loyal customers Special Packages for students Special arrangements on special events like Eid, or Christmas

6.5 Research & Development: We will have a research & development department. We have included this because every product runs for a fixed amount of time. If it is not changed in from or any other presentation the product cannot stay in the market. So, to make our products surviving for a long period, we have a plan to do these followings under this department. 1. Nutrition Test: R&D will setup a nutrition test facility to maintain and observe the nutritious power of our foods. As we are concerned with our customers' well being, we are very much conscious about the nutrition of our foods. 2. Test of Healthiness: We will make comparison the healthiness of all foods will be under our service. Because the more healthy food we will serve people will get more interested with our items. And this will be a plus point for our business. 3. New Recipes: We will search for new recipes, new ways of serving foods, or new type of food which can make a run in parallel to our products. Because innovation creates some extra images and people are fond of something new. So we will arrange some recipe contest or new food idea hunt type program to make this in a chain.

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7.

Management

Without a proper management system a business cannot be run well. So we are very much concerned about our management body of our business. And we have a flat structure management of business organization. 7.1 Management Body Chief Executive Officer (CEO) Abdur Rakib Akon Senior Executive Officer Md. Nazmul Huda Assistant Executive Officer Reza Al Saad Shamatha Islam Dhaka Branch Officer Ahmed Ibtehaj Khulna Branch Officer Md. Masrul Mollah Chittagong Branch Officer Hasan Md. Saiful Islam Head, Product Control & Management Arifuzzaman Khan Head, Supply Chain Management Safwan Ahmed Head, Human Resource Reza Al Saad Head, Marketing & Promotion Md. Nazmul Huda Mohua Rashid Head, Research & Development Abdur Rakib Akon

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Accounts officer Md. Masrul Mollah Legal Advisors' committee Advocate Salahuddin Yusuf Advocate Sharmin Sultana Waliur Rahman (Magistrate) 7.2 Management Structure Our Management structure will be flat. All of the activities will be observed and monitored by the executive officers' panel. And thus we are not in a complicated form of business we think this will be enough for a business to make a first run. But if we plan to go for making our business corporate, we will have concerns about our management and we will re-organize our management body.

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8.

Financial Forecasting

Here we have prepared our forecasting of our business for our business. First we have shown our expenses and then we tried to show how our projected revenue will generate. 8.1 Expenditures One time expenses

Tk.

Three Buildings Contract cost for five years costs:

800000

Business License Fee:

45000

Two Trucks Contracted for five years:

75000

Furnitures and Decorations

155000

Motor Vans (30)

3500610

Other setup charges

125240

VAT

705120

Total

5405970

Depreciation costs for every year within a five year period: Years

1st Year

2nd Year

3rd Year

4th Year

5th Year

Depreciations

1081194

864955

691964

553572

2214285

3rd Year

4th Year

5th Year

12 months expenditure throughout the year Expenses

1st Year

2nd Year

Rental

144000

144000

144000

144000

144000

Administrative

500500

618000

523000

541000

603000

Vans & Trucks

614400

612370

643050

655090

656050

Salaries

670000

678000

682000

689000

710000

1081194

864955

691964

553572

2214285

Materials

556000

568500

582300

589400

597600

Others

412000

423000

448000

453000

456000

3978094

3908825

3714314

3625062

5380935

Depreciations

Total

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8.2 Investments & Revenues Our Investors total contributed: Abdur Rakib Akon

Tk. 12500000

Reza Al Saad

10900000

Md. Masrul Mollah

9730000

Md. Nazmul Huda

13155000

Total

Tk. 46285000

Revenue Calculation 1st Year

2nd Year

3rd Year

4th Year

5th Year

Expenses

3978094

3908825

3714314

3625062

5380935

Projected revenue

3987000

5020500

7343000

9786000

10105000

8906

1111675

3628686

6160938

4724065

Balance

From above we can see that we will enjoy the most incomings in the 4th year after launch. And this is a positive sigh that we will have been reached at the break even point within 1st year.

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9.

Exit Strategy

If some of misconducts or any breakup among our partnership comes may be we can dismiss our business. Though there is a low possibility but if one of the following scenarios happens we will close our business1. If any bankruptcy happens to us 2. If law enforces us to do so 3. If our partnership breaks up 4. If we become unable to run business

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10.

Appensix

Sample Price Menu (As we haven't decided our products, so a hypothetical and short form of price menu is given here) Items

Price (Tk.)

Sweet Pithas Vapa Pitha

15/=

Patishapta Pitha

12/=

Semai pitha cooked by gur (per plate)

15/=

Takti Pitha

5/=

Pooli Pitha

10/=

Nakshi Fula

20/=

Ras Chitai

18/=

Dudh Chitai

15/=

Chilly Pithas Jhal Pooli

10/=

Dim Makhan

12/=

Jali Pitha

8/=

Jhal Takti

5/=

Spicy Pithas Vaja Pooli

12/=

Vaja Patishapta

15/=

Shukna Chitai

8/=

Shukna Chitai with chicken Pan Pitha

30/= 5/=

Fluid Items Coconut Water

5/=

Bel Sharbat

8/=

Lebu Sharbat

5/=

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References We have followed some guidelines from 'Writing your business plan is a lot of hard work, however it is' and 'Restaurant Business Plan submitted by Abonda' can be downloaded from http://www.scribd.com Porter's five factor's model picture is taken from http://foodandretail.blogspot.com/2007/10/porter-5-forces-how-they-work-3.html

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