New Business Idea BAKING BISCUITS Production and marketing with cost in USD

 BAKING BISCUITS

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%.

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.

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

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

 

Total Operating Costs

10,139

121,667

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.