Introduction
This business idea is for the production and marketing of biscuits. Biscuits are confectionary products and they refer to small thin products of varying shapes, tastes that are of soft brittle texture.
They are referred to by different names in different countries. The revenue is estimated at US$1,404,000 per year. The payback period is really short i.e. 2 months and net profit for this investment is 92%.
This business idea is for the production and marketing of biscuits. Biscuits are confectionary products and they refer to small thin products of varying shapes, tastes that are of soft brittle texture.
They are referred to by different names in different countries. The revenue is estimated at US$1,404,000 per year. The payback period is really short i.e. 2 months and net profit for this investment is 92%.
Production process
The process consists of combining wheat flour, sugar, margarine, milk and water in a dough mixer. The dough is then mixed with baking powder and kept for around three hours. The prepared dough is then passed through biscuit molding, stamping, and cutting machines and finally baked in an oven. The biscuits are then cooled, sorted and packed neatly.
The process consists of combining wheat flour, sugar, margarine, milk and water in a dough mixer. The dough is then mixed with baking powder and kept for around three hours. The prepared dough is then passed through biscuit molding, stamping, and cutting machines and finally baked in an oven. The biscuits are then cooled, sorted and packed neatly.
Capital Investment Requirements in US$
Capital investment item
Units Qty @ Amount Brick oven No. 1 2,500 2,500 Dough mixer No. 1 1,750 1,750 Weighing scale No. 2 75 150 Tray (pieces) No. 5 10 50 a No. 1 50 50 Baking trays No. 50 15 750 Packing materials (kg) No. 200 1.5 300 Van No. 1 26,000 26,000 TCs on Machinery 31,550
Units Qty @ Amount Brick oven No. 1 2,500 2,500 Dough mixer No. 1 1,750 1,750 Weighing scale No. 2 75 150 Tray (pieces) No. 5 10 50 a No. 1 50 50 Baking trays No. 50 15 750 Packing materials (kg) No. 200 1.5 300 Van No. 1 26,000 26,000 TCs on Machinery 31,550
Production and Operating costs in US$
| Cost Item | Units | @/ day | Qty/ day | Pdn cost/ day | Pdn cost / month | Pdn cost year |
|---|---|---|---|---|---|---|
| Wheat flour | kg | 2 | 20 | 40 | 1,040 | 12,480 |
| Sugar | kg | 1.2 | 50 | 60 | 1,560 | 18,720 |
| Cooking oil | Ltrs | 2 | 40 | 80 | 2,080 | 24,960 |
| Firewood | tone | 13.5 | 3 | 41 | 1,053 | 12,636 |
| Margarine | kg | 4.8 | 12 | 57.6 | 1,498 | 17,971 |
| Non fat milk powder | kg | 2.5 | 30 | 75 | 1,950 | 23,400 |
| Salt | kg | 0.2 | 5 | 1 | 26 | 312 |
| Sub-total | 354 | 9,207 | 110,479 |
General costs(overheads)
| Utilities(water and power) | 50 | 600 |
|---|---|---|
| Labour | 50 | 600 |
| Rent | 125 | 1,500 |
| Miscellaneous costs | 50 | 600 |
| Depreciation(Asset (write off)Expenses) | 657 | 7,888 |
| Sub –total | 932 | 11,188 |
- Production costs assumed 312 days per year with a daily capacity of 9000 biscuits
- Depreciation (fixed assets write off) assumes 4 years life of assets written off at 25% per year for all assets Direct costs include materials, supplies and other costs that directly go into production of the product.
Project product Costs and Price Structure in US$
| Item | Qty /day | Qty/yr | @ | Pdtn cost /yr | UPx | TR |
| Biscuits | 9,000 | 2,808,000 | 0.04 | 121,667 | 0.5 | 1,404,000 |
Profitability Analysis
| Profitability Item | Per day | Per month | Per Year |
|---|---|---|---|
| Revenue | 4,500 | 117,000 | 1,404,000 |
| Less production and operating Costs | 390 | 10,139 | 121,667 |
| Profits | 4,110 | 106,861 | 1,282,333 |
Market Analysis
Biscuits are delicious to children and therefore have a ready market. Schools, shops, street vending and market places, supermarkets are potential buyers.
Sources of raw materials:
Raw materials are locally available.
Government Facilities and Incentives
The government maintains favorable tax policies for industrialists. They are represented in the formulation of policies on trade and forward their input to the budget through their representatives.
