1. INTRODUCTION
All small scale industry forms the back born of Indian Business
Scenario. The SSI have substantial scope for increasing employment as they are
labour intensive and require Comparatively less capital. SSI contributes
significantly to social and economic development.
So it is said that “Small is Beautiful”. It is comparatively small in
investment cost as such small enterprises are not only beautiful but also
beneficial, efficient and reliable. The expansion of service sector provides
ample opportunity to SSI in this millennium during this past 50 years.
For Scissors there is very good market. As small scale industry,
this unit will get all the benefits of small scale industry. There is full scope of
expansion in future for this unit and market will not constrain in overall
development of the unit and fast growth is assured.
1

2. PROJECT AT A GLANCE
Name of the unit :- Angle Pvt. Ltd.
Address for communication :- 307,Vitbhavan,
Gondal Road,Rajkot.
Form of Organization :- Partnership Firm
Name of Promoter :- Vruta N. Patel
Product :- Scissors
Size of the unit :- Small Scale Unit
SSI Registration No. :- Applied for
Location of the unit :- Aji Industrial area,
Near Kamani foundry,
Rajkot - 360 003
2

3. BIO-DATA OF PARTNERS
Partner - 1
Name :- Vruta N. Patel
Address :- 7, Ranchhodvadi
Block No. 5, “Shivdhara”
Near Kuwadava Road,
Rajkot – 360 003.
Age :- 21 yrs.
Qualification :- BBA & MBA
Nature of work :- Finance
Details of property :- Land & Building
Experience :- Fresh
Financial Contribution :- Rs. 20,00,000/- [25% of total capital]
3

4. Partner - 2
Name :- Navinbhai K. Patel
Address :- 7, Ranchhodvadi
Block No. 5, “Shivdhara”
Near Kuwadava Road,
Rajkot – 360 003.
Age :- 50 yrs.
Qualification :- B.Sc. B.Ed.
Nature of work :- Production & Development
Details of property :- Land & Building
Experience :- 2 years of experience in
Glare Appliances Pvt. Ltd.
Financial Contribution :- Rs. 20,00,000/- [25% of total capital]
4

5. ORGANIZATION STRUCTURER
PARTNERS
Management Representative
General Manager
PROPOSED LOCATION &
Finance
Production Department Personnel Department Marketing Department
Department
Finance Mgr Production Mgr Personnel Mgr Marketing Mgr
Purchase
Accountants Skilled Labour Tech Supervisor Sales Manager
Mgr
Semi skilled Labour
Salesman
Unskilled Labour
Peon
Watchman
JUSTIFICAITON
5

6. Most important thing to consider is the location of unit. It is
important for any firm to decide where the unit should be established. A good
location provided many advantages and it also reduces the cost of production &
distribution which affect overall profitability of a unit. This unit is located at :-
Aarti Estate,
Near Manda dungar,
Behind Aji Dam,
Rajkot.
Incentivies / Advantages / Justification:-
 It is industrial area.
 Labor is easily available.
 Situated in the Rajkot, so transportation is easily available.
 Priority in electricity connection.
Proximity to market.
MARKET POTENTIAL
6

7. Market Analysis
There is very good market for their product in our country. The
market for consumer goods is expanding very fast.
This unit proposes to produce various types of scissors for various
purposes. There is no company in organized sector in this line. Many small
units are manufacturing scissors of low quality items in unorganized sectors.
The only major group “Fiskars Group” is producing their product.
Hence to conclude the market will not be a constraint in overall
development of the unit and fast growth is assumed.
Competitors
The competitors of the product is only :-
 Fiskars situated at:-
By Godrej and Boyce Mfg. Co. Ltd.
Pirojshanagar Vikhroli,
Mumbai - 400079, INDIA
7

8. IMPLEMENTATION OF SCHEDULE
SSI Registration - 10 days
Acquisition of land & building - 90 days
Finance Assistance - 100 days
Arrangement of Power - 90 days
Acquisition of Machinery - 10 days
Installation of Machinery - 100 days
Appointment of Staff - Immediate as per
Requirement & Final
Recruitment within 15 days
Trial Production - 120 days
Thus, time taken for commencement of actual production is around
4.5 month.
8

9. RAW MATERIAL
Basic Raw-material:-
(a) Stainless Steel AISI - 420
(b) Polypropylene
(c) Thermoplastic elastomer rubber
(d) Stainless Steel rivets
Packing Raw-material:-
(a) Polyvinyl sheets
(b) Packing cards printed
(c) Corrugated cartoons – Inner Outer
The major raw-material in this industry is stainless steel, plastic
granules, thermoplastic elastomer & stainless steel rivets. The stainless steel
will be purchased from Steel Authority of India Ltd. (SAIL), Baroda. The
delivery time will be 30 days. Plastic granules will be purchased from M/s.
Murlidhar polymer, Rajkot. The delivery time will be 3 days. Thermoplastic
Elastomer will be imported from M/s. Advance Elastomer system LP., USA.
The delivery time will be 30 days. Stainless steel rivets will be purchased from
M/s. Kundar Industries Ltd. Thane. The delivery period will be 30 days.
9

10. LIST OF MACHINERY & EQUIPMENTS
No. Particulars Value
1. Power Press Machine 3,00,000
2. Surface Grinding Machine 2,40,000
3. Taper Grinding Machine & 13,00,000
Ledged Teeth Grinding Mach.
4. Power Searing 2,50,000
5. Buffing Polishing Machine 2,50,000
6. Blister Machine 2,90,000
7. Air Compressor Machine 2,60,000
8. Auto Molding Machine 4,00,000
9. Oil fire furnace 2,10,000
10. Lath Shaping, Drill, Bench,
Surface Mach. 2,50,000
TOTAL 40,00,000
10

11. MANUFACTURING PROCESS
The production process is as follows :-
 Firstly, strips of various sizes are cut from stainless steel sheet with
help of shearing machine.
 Then, blanking is done of various sizes with the help of various
types of dies on power press machines.
 When all various types of blades are bunched and on them
hardening and tem hardening and tempering are done on furnace
shop.
 Then after all blades are cleaned and washed with hot water and
cleaning chemical.
 Then buffing & polishing is done.
 Then edging is done which is followed by inspection.
 Inspected blades are moulded with various types of handle moulds.
 Then, moulded blades are bended as per requirement.
 Then, riveting is done.
 At last washing, inspection and packing is done.
11

12. BASIS AND PRESUMPTION
 It is presumed that there will be 300 working days in a year.
 Work will be done in single shift.
 Salary will be at prevailing rate.
 Time need for 100% utilization is after 5 years.
 No. of Working Hours Per day will be 8 hours.
 Production capacity will be installed of 2,50,000 pieces p.a.
12

13. Staff & Workers Details
Particulars No.
Chief Executive 2
Manager (Production) 1
Manager (Marketing) 1
Skilled Workers 5
Unskilled Workers 3
Accountant 1
Store & Dispatch Clerk 1
Clerical Staff 2
Sales Representative 6
Total 22
13

14. FINANCIAL DETAILS
Fixed Capital
Particulars Amount
Land 12,50,000
Building 20,00,000
Furniture 90,000
Computer 60,000
Machinery & Equipment 40,00,000
Preliminary Expense 1,00,000
Total 75,00,000
14

15. Raw Materials
Particulars Qty. Price Amt
(K.G.&P.C.) (K.G.&P.C.)
Stainless Still 420 - 450 67.78 30,500
Polypropline 250 98.00 24,500
Thermoplast Elastomer 300 213.33 64,000
Stainless Still Rivets 26000 1.08 28,000
Packing Material
Plyvinile Sheets 13,000 6.73 87,500
Packing Cards 13,000 0.40 5,250
Corrugated Cartoons --------- 10,250
Total P.M. 2,50,000
15

16. Utilities
Power 58,000
Fule 7,000
Total Production
Per Month 13,000 Pc.
Per Year 1,56,000 Pc.
Total Sales
Per Month 13,000 X 50 Rs. 65,000
Per Year 1,56,000 X 50 Rs. 78,00,000
Salary & Wages
Particulars No. Rate Amt
Manager (Production) 1 4,500 4,500
Chief Executive 2 6,000 12,000
Manager (Marketing) 1 5,000 5,000
Skilled Workers 5 2,500 12,000
Unskilled Workers 3 1,834 5,500
Accountant 1 3,500 6,000
Store & Dispatch Clerk 1 2,000 2,000
Clerical Staff 2 1,500 3,000
Sales Representative 6 2,000 12,000
Total PM 60,000
PA 7,20,000
16

17. Other Overheads
Particulars Amount
Advertising 8,000
Posting & Stationery 6,000
Telephone 5,000
Sales Expenses 4,000
Misc. Expenses 5,000
Insurance 5,000
Local Taxes 3,000
Transportation 5,000
Repairs and Maintenance 9,000
Total PM 50,000
PA 6,00,000
17

18. Working Capital
Particulars Amount
Raw Materials 2,50,000
Salary & Wages 60,000
Utility 65,000
Other Expenses 50,000
Total 4,25,000
Total Cost of Project
Particulars Amount
Fixed Capital 75,00,000
Add: Working Capital 4,25,000
Bank Balance 2,50,000
Total 81,75,000
18

19. Sources of Finance
Particulars Amount Amount
Promoter’s Contribution
Partner 1 (50 %) 20,00,000
Partner 2 (50 %) 20,00,000 40,00,000
Loan from SBI @ 11.5% 41,75,000 41,75,000
Total 81,75,000
19

20. Cost of Production
Particulars 1st Year 2ndYear 3rdYear
Raw Materials 30,00,000 36,00,000 42,00,000
Labour 2,16,000 2,59,200 3,02,400
Other Exp 1,20,000 1,44,000 1,68,000
(Variable)
Utilities 7,80,000 9,36,000 10,92,000
Total Cost 41,16,000 49,39,200 57,52,400
Variable 26.38 26.38 26.38
Cost P.U.
Depreciation 13,49,500 10,30,870 7,94,763
Labour 5,04,000 6,04,000 7,05,000
Other Expenses 4,80,000 5,76,000 6,72,000
Interest 3,60,000 3,60,000 3,60,000
Int. (Borrowed) 4,80,125 3,88,125 2,96,125
Total Fixed Cost 31,73,625 19,28,925 20,33,725
Total Cost 72,89,625 68,68,125 77,96,125
P.U. cost 46.73 46.73 46.73
20

21. Cost of Capital
st
Particulars 1 Year 2nd Year 3rd Year
Sales 75,00,000 90,00,000 1,05,00,000
Raw Material 30,00,000 36,00,000 42,00,000
Utilities 7,80,000 9,36,000 10,92,000
Salary & Wages 7,20,000 8,64,000 10,08,000
Cost of 45,00,000 54,00,000 63,00,000
Production
Gross Profit 30,00,000 36,00,000 42,00,000
Less: Other Exp. 6,00,000 7,14,000 8,40,000
Depreciation 13,49,500 10,30,870 7,94,763
Preliminary exp. 20,000 20,000 20,000
Earning Before 10,30,500 18,35,130 25,45,237
Int. & Tax
Less:
Interest on 3,60,000 3,60,000 3,60,000
Borrowed cap.
Intrest on own 4,80,125 3,88,125 2,96,125
capital
Earning Before 1,90,375 10,87,005 18,89,112
Tax
Less:
35% Tax 66,631 3,80,452 6,61,189
Earning After 1,23,744 7,06,553 12,27,923
Tax
ADD:
Deprecation 13,49,500 10,30,870 7,94,763
LESS:
Inst Of loan 12,80,125 11,88,125 10,96,125
Net Cash Accrual 1,93,119 5,49,298 9,26,561
21

22. Depreciation
Building
Cost Price 20,00,000
Less: 15% dep. 3,00,000
At the end 1st yr. 17,00,000
Less: 15% dep. 2,55,000
At the end 2nd yr. 14,45,000
Less: 15% dep. 2,16,750
Machinery
Cost Price 40,00,000
Less: 25% dep. 10,00,000
At the end of 1st yr. 30,00,000
Less: 25% dep. 7,50,000
At the end of 2nd yr. 22,50,000
Less: 25% dep. 5,62,500
22

23. Cost Per Unit
Particulars Amount
Total Variable cost Rs. 41,16,000
Total Fixed cost Rs. 31,73,625
Total Production Cost Rs. 72,89,625/-
Cost Per Unit = Total Production Cost
-------------------------
No. of Units Produced
Rs. 72, 89,625
= ---------------
1, 56,000 units
= 46.73 Rs. Per unit
23

24. Break Even Analysis
Contribution = Selling price – Variable cost per unit
= 50 – 26.38
= 23.62
B.E.P. in units = Total Fixed Cost
Contribution/unit
= Rs. 31, 73,625
23.62/unit
= 1, 34,361 units
B.E.P. in Rs. = B.E.P in units x Selling Price
= 1, 34,361 x 50
= Rs. 67, 18,050
24

25. Interest & Repayment of Loan
Loan from SBI @ 11.5%
1st 2nd 3rd
Install. 8,00,000 8,00,000 8,00,000
Interest 4,80,125 3,88,125 2,96,125
Total 12,80,125 11,88,125 10,96,125
R.O.I. = EBIT x 100
Total Cost
= 13,03,865 x 100 / 81,75,000
= 15.94%
Contribution = S.P. – V.C.
= 50 – 26.38
= 23.62
25

26. Cost of Capital
Cost Of Capital :
= Int. on own cap. + Int. on borrowed cap.
Total Capital
= 3,60,000 + 4,80,125
81,75,000
= 10.28%
26

27. Return of investment
Return on = Earning Before Interest & Tax x 100
Investment Total Capital Investment
= Rs. 13,03,865 x 100
Rs. 81, 75,000
= 15.94 %
27

28. NAME & ADDRESS OF SUPPLIERS OF
RAW MATERIAL AND MACHINERY
Raw Material
(1) Stainless Steel Sheet
Steel Authority of India,
Branch Office,
8th Floor, Marble Arch,
Race Course,
Baroda – 390 007
(2) Poly Propylene
Murlidhar Polymers,
(Dealers, Reliance Industry Limited)
207, Amidhara Complex,
37, Karanpara,
Rajkot – 360 001
(3) Rubber
Advanced Elastomer System Hong Kong Ltd.,
(Asia Trade Branch)
15/F, Radio City,
Hong Kong.
28

29. (4) Stainless Steel Rivets
Kundan Industries Ltd.,Kundan House,
Harshiddhi Estate,Goria Pada,
Near Waliv Telephone Exchange,
Vasai (East),Thane.
Machinery
(1) Power press machine
Shailesh Sales Corporation,
10, Bhaktinagar Station Plot,
Rajkot – 360 002
(2) Surface Grinding Machine
Metro Machine Tools,
14, Milpara,
Dhebarbhai Road,
Rajkot – 360 002
(3) Taper Grinding Machine & Ledger Teeth Grinding Machine
E. Siepmann & Co.,
Eintrachtsrabe 21,
D-5650 Solingen 1 West – Germany
29

30. (4) Power Searing machine
G.S. Industries,
1/4, Maudi Plot,
Opp. Kishara Oil Mill,
Rajkot – 360 004
(5) Buffing Polishing machine
Moldex Agencies,
Suvidhinath App.,
Kanta Stri Vikas Gruh Road,
Rajkot – 360 002
(6) Blister Machine
Antiqueart,
Shri Ram Co-operative Indus Premises,
Block – J, Ram Mandir Road,
Gore Gaon (West)
Mumbai – 400 104
(7) Air Compressor Machine
Vrujral Sales Corporation,
Punit Society,
Near Nilkanth Cinema,
Rajkot – 360 002
30

31. (8) Auto Moulding machine
Samrat Engineering,
Opp. Bombay Conductor,
Vatva,
Ahmedabad
(9) Oil Fire Furnace
Thermochem Metod Treators,
G.I.D.C.
Surendranagar
(10) Lathe, Shaping, Drill, Bench, Surface Machine
Ashok Enterprise,
Vanjiya Bhavan,
Dherbar Road,
Rajkot – 360 002
(11) Powder Grinder Machine & Hand Press Machine
Ankita Enterprises,
Paras Housing Society,
Jamnagar
31

32. Balance Sheet
Sources of Funds
Owner’s Capital
Partner 1 20,00,000
Partner 2 20,00,000
Loan Taken 41,75,000
EAT 3,01,431
TOTAL 84,76,431
Application of Funds
Gross Fixed Assets 74,00,000
Less: Dep. 13,49,500
Stock 23,365
Debtors 21,52,566
Cash & Bank Balance 2,50,000
TOTAL 84,76,431
32

33. Cost Sheet
Particulars Amount Amount
Opening Stock of R.M. - -
Add: Purchase 30,00,000
Less: Closing Stock of R.M. 2,50,000
R.M. Cost 27,50,000
Direct Labour 2,16,000
Direct Exp.: Utilities 7,80,000
Prime Cost 9,96,000
Factory Overheads
Managers 54,000
Store & Dispatch Clerk 24,000
Repairs and Maintenance 1,08,000
Dep on Factory Building 3,00,000
Dep on Machine 10,00,000
Factory Cost 14,86,000
33

34. Office Expenses
Postage & Stationery 72,000
Accountant 42,000
Chief executive 1,44,000
Clerical staff 18,000
Telephone 60,000
Local Taxes 36,000
Insurance 60,000
Misc. Expenses 60,000
Dep on Computer 36,000
Dep on Furniture 13,000
Office Cost 5,41,500
Selling & Distribution Exp
Sales representative 1,44,000
Manager 60,000
Transportation 60,000
Advertising 96,000
Sales Expenses 48,000
Cost of Sales 5,08,000
Total Cost 62,58,135
Profit 12,41,865
Total Sales 75,00,000
34

35. Particulars of Raw Materials
Schedule of Raw Materials
Particulars Year1 Year2 Year3
Opening Stock - 2,50,000 3,00,000
Add: Purchase 30,00,000 36,00,000 42,00,000
30,00,000 38,50,000 45,00,000
Less : Closing Stock 2,50,000 3,00,000 3,50,000
Raw Materials 27,50,000 35,50,000 41,50,000
Consumed
Particulars of Finished Products
Schedule of Finished Product
Particulars Year1 Year2 Year3
Opening Balance - 22,365 28,065
Add:
Goods Manufactured 75,22,365 90,28,065 1,05,32,711
Less:
Sales During Year 75,00,000 90,00,000 1,05,00,000
Closing Stock 22,365 28,065 32,711
35

36. Schedule For Fixed Assets
Schedule of Written Down Value Of Fixed Assets
Particulars Gross Block Depr. Net Block
Land 12,50,000 - 12,50,000
Building 20,00,000 3,00,000 17,00,000
Furniture 90,000 13,500 76,500
Computer 60,000 36,000 24,000
Machinery 40,00,000 10,00,000 30,00,000
Preliminary Exp. 1,00,000 20,000 80,000
Total 75,00,000 13,69,500 61,30,500
36

37. Schedule For Factory Overheads
Schedule of Factory Cost for The Three Years
Particulars Year-1 Year2 Year3
Salary to Managers 54,000 54,000 54,000
Salary Dispatch Clerk 24,000 24,000 24,000
Repairs & Maintain 1,08,000 1,28,520 1,51,650
Misc. Expenses 60,000 71,400 84,000
Electricity Expenses 6,96,000 9,36,000 10,92,000
Dep. of Building 3,00,000 2,55,000 2,16,750
Dep. of Machinery 10,00,000 7,50,000 5,62,500
Total Factory Cost 22,42,000 22,18,920 21,84,900
37

38. Schedule of Office & Administration Expenses
Schedule of Office & Admn. Exp. For three years
Particulars Year1 Year2 Year3
Salary to Accountant 42,000 42,000 42,000
Salary to C.E. 1,44,000 1,44,000 1,44,000
Salary to Clerical 18,000 18,000 18,000
Staff
Postage & Station 72,000 85,680 1,00,800
Telephone Exp. 60,000 71,400 84,000
Local Taxes 36,000 42,840 50,400
Insurance 60,000 71,400 84,000
Misc. Expenses 60,000 71,400 84,000
Dep. of Computer 36,000 14,400 5,760
Dep. of Furniture 13,500 11,475 9,753
Total Office & 5,41,500 5,72,595 6,22,713
Admn. Cost
38

39. Schedule of Selling & Distribution Expenses
Schedule of Selling & Distribution Exp. For three years
Particulars Year1 Year2 Year3
Salary to
Marketing Manager 60,000 60,000 60,000
Sales Rep. 1,44,000 1,44,000 1,44,000
Transportation 60,000 71,400 84,000
Advertisement Exp. 96,000 1,14,240 1,34,400
Sales Expenses 48,000 57,120 67,200
Total Selling & 4,08,000 4,46,760 4,89,600
Dist. Cost
39

40. Accounting Policies
Angel Pvt. Ltd. follows the following accounting policies
• Fix amount of loan repayment every year along with the
interest of the current year.
• The credit period allowed to the customers is three weeks.
• Suppliers allow us credit period of 2 week or sometimes
differ on the amount of raw materials at a time.
• Salaries of all the staff in all categories are assumed to be
constant in all the first three years.
• Salaries are paid on 7th of every month.
• Closing stock is valued on its cost and not the market
price.
40

41. RISK FACTOR
When business unit is started there are many benefit provided to them as
well as there are many risk factor.
Risk factor for this unit is only one i.e. when countries like China,
Taiwan, etc. dumped their product in India at that time it is difficult to compete
in the market.
But this risk can also be minimized by aggressive sales promotion
activity.
41

42. A
Business Plan
On
SCISSORS
Prepared By
Vruta N. Patel
M.B.A. Sem-III
Roll No. 62
Submitted To
Director Dr. Rajesh Patel
Academic Year
2010-2011
Name of Institute
N. R. Vekaria Institute of Business Management
Bilkha Road,
Junagadh.
42

43. A
Business Plan
On
KHAKHARA
Prepared By
Sonal D. Gondaliya
M.B.A. Sem-III
Roll No. 25
Submitted To
Director Dr. Rajesh Patel
Academic Year
2010-2011
Name of Institute
N. R. Vekaria Institute of Business Management
Bilkha Road,
Junagadh.
43

44. INDEX
Sr. No. Particular Page No.
1 Introduction 1
2 Project At a Glance 2
3 Bio-Data of Partners 3
4 Organization Structure 5
5 Proposed Location & Justification 6
6 Market Potential 7
7 Implementation Schedule 8
8 Raw Material 9
9 List of Machinery & Equipment 10
10 Manufacturing Process 11
11 Financial Details 14
12 Break Even Analysis 24
13 Name & Address of Suppliers of Raw Material and 28
Machinery
14 Balance Sheet 32
15 Accounting Policies 40
15 Risk Factor 41
44