New Business Idea MAKING INSTANT COFFEE Production and Marketing with Costs in USD

 MAKING INSTANT COFFEE POWDER

Introduction
Coffee is a household drink in world and a major foreign exchange earner if done properly. It is widely produced and many in world take it as a beverage, and world over it is a cherished drink. The demand for coffee as a beverage is on the rise locally and any venture in its production and distribution is viable as it involves adding value to the coffee beans.
This project involves milling coffee beans into desired powder and sold over the counter to a waiting customer. The project requires an estimated fixed capital of US$ 5,300, operating costs of US$ 64,841 generating revenue of US$ 116,064 in the first year of operation.
The Return on Investment(ROI)period is 5 months.

Production Process
The process is simple. Coffee beans are roasted first using a coffee roaster and then blended

Capital Investment Requirements

Capital Investment Item	Units	Qty	@	Total
Coffee Grinder(20kgs-2HP&starter)	No	1	2,500	2,500
Coffee Roaster(1.5HP&starter)	No	1	1,400	1,400
Sealing machine	No	1	200	200
Sieves	No	5	20	100
Utensils	No	-	-	400
Furniture & Fittings	No	-	-	700
Total	5,300

Production and Operating Costs

Cost Item	Units	@	Qty/ day	Pdn Cost/ Day	Pdn Cost/ month	Pdn Cost/ year
Direct Costs
Fresh Coffee Nuts	Kgs	1.1	15	16.5	429	5,148
Chicory Nuts	Kgs	2	7	14	364	4,368
Packaging materials	Pcs	0.25	350	87.5	2,275	27,300
Sub-total	372	118	3,068	36,816

General costs(Overheads)

Rent	325	3,900
Labour	1,050	12,600
Selling and Distribution	150	1,800
Cleaning and Toiletries	104	1,248
Utilities	475	5,700
Miscellaneous	121	1,452
Depreciation	110	1,325
Sub-total	2,335	28,025
Total Operating Costs	5,403	64,841

1) Production costs assumed 312 days per year with daily the capacity of producing 25kgs of instant coffee powder.
2) Depreciation (fixed asset write off) assumes 4-years life of assets written off at 25% per year for all assets.
3) Direct costs include: materials, supplies, and other costs that directly go into the production of the product.
4) Total monthly days assumed are 26-days.
5) The valuation currency used is United States Dollars.

Project Product Costs and Price Structure

Item	Qty/ day	Qty/yr	@	Pdn Cost/yr	UPx	Total Rve
Instant Coffee	400	124,800	0.5	64,841	0.93	116,064

Profitability Analysis Table

Profitability Item	Per day	Per Mnth	Per year
Revenue	372	9,672	116,064
Less: Production and Operating Costs	212	5,514	64841
Profit	160	4,158	51,223

Market Analysis
The demand for instant coffee is on the rise especially among affluent people in society in many countries who are urban-based and from the middle class. Its potential is promising. The revival of coffee shops of the seventies would go a long way to tap the market and
popularize the product. This gives immense rise to export potential. 

Government Incentive
A kilo of this instant coffee powder would fetch a lot more than the raw coffee beans. There are no taxes imposed on exports and any Value Added Tax (VAT) input is claimed and reimbursed by the tax body as a way of encouraging and facilitating exporters.