Project profit and loss Statement
The profit and loss statement is prepared on the basis of the following assumptions.
- I will be able to supply fish to at least 50 hotels per day in the first year, 75 hotels in the second year and 100 hotels in the third year.
- Each hotel will order for 50 kilo grams of fish per day
- The company will be able to deliver fish to hotels 300 days per year
- The cost of buying fish will be around £1 per unit (one kilo)
- I will be able to sell fish for £2 per unit
- The profit and loss account is prepared for three years
Year 1 Year 2 Year 3
Gross Revenue from sale of fish 1500000 2250000 3000000 ___________________________________
Expenses:
Rent 2400 2400 2400
Purchase of freezers 1000 —— ——
Furnishing the building 2000 ——- ——-
Purchase of pick up van 5000 ——– ——-
Purchase of fish 750000 1125000 1500000
Employee salary 30000 40000 50000
Fuel and maintenance cost of vehicle 5000 6000 7000
Electricity, Telephone bill , etc. 5000 6000 7000
Interest 15000 20000 25000
Advertisement 5000 10000 15000
Legal expenses 5000 2000 2000
Other expenses 10000 12000 15000
___________________________________
Total costs 835400 1223400 1614400
_________________________________
Gross profit 664600 1026600 1385600
Less: Tax @ 33% 219318 338778 457248
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Net Profit 445282 687822 928352
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The capital required for the first year will be mobilised in such a way that Seven Hundred Thousand pounds will be taken as loan from bank and other financial institutions and the remaining £135400 will raised from self and family sources.
Implementation Plan
The project plan will be implemented through the following phases.
PHASE 1 (Week 1)
The first phase of the project will be to approach a bank for sanctioning a loan for £700000 (The remaining £135400 will be raised from self and family sources). In this stage I would take the project proposal to the bank manager and will have a discussion on sanctioning the loan. If he agree to sanction the loan only I will be able to go further with the project. I hope my bank (State Bank of Travancore, Thiruvananthapuram, Keral) will be happy to sanction the amount as this is a viable projcet and there is less competition in the proposed line. Moreover my good will in the bank also will be a favourable condition.
PHASE 2 (Weeks 1 – 5)
Hiring the establishment would be the next step in the implementation of the project. It is ideal to find a location somewhere near Vizhinjam, a village in the Thiruvananthapuram district where the fishing harbour is located. After identifying an appropriate building in the proposed area, I have to talk to the owner of the building regarding the terms and conditions of hiring the building and sign the agreement. The building would be hired initially for one year and at the end of each year the hiring agreement has to be renewed. Once the building is hired, necessary furnishing and modification works will be under taken so as to match the project requirements.
PHASE 3 (Weeks 3 –9)
In this stage two things have to be done.
i. To apply for an SSI licence
ii. To install the equipments
I have to apply to the Government of Kerala, Ministry of Industries for a Small Scale Industry (SSI) licence number as this is an essential condition for running any small business in the state. In order to apply for the SSI licence I have to submit a letter from the pollution control department along with the project proposal and application. It may take around two months to secure the SSI licence number. Mean while I can concentrate on other activities relating to the implementation of the project.
Before installing the freezers, it is important to invite tenders and quotations. One week will be given for submitting quotations. The lowest quotation will be accepted and freezers will be purchased from them.
PHASE 4 (Weeks 9 – 11)
Recruitment and training of staff is the first step in this phase. Vacancies will be advertised through dailies and other sources like internet. Qualifications will be fixed according to the position. For example, for the post of finance officer a degree in accountancy is a must. Applicants will be asked to send their applications either directly by post or through e-mail. Experience in the same field will be an added advantage. The applications will be screened and the successful applicants will be called for a detailed disclosure. The selected candidates will be given three days training in their concerned fields. Together with the training the service of an experienced person will be used to design broachers and advertisements.
PHASE 5 (Weeks 9 – 11)
The final phase of the project implementation will comprise of the following activities
- Purchase of delivery van
- Finding customers
- Storing fish
- Final delivery of fish
Quotations will be collected from different companies for buying a delivery van and the van will be purchased from the company which offers the lowest quotation and feasible conditions.
Simultaneously the marketing people will be assigned to find client hotels and the purchase department will buy fish and store it in the freezers. Once the orders are received, the marketing people will deliver fish to the hotels and collect orders for the next day/week.
Monitoring and Evaluation
Different processes in the project will be evaluated using the critical path analysis and risk analysis. The diagram showing the critical path analysis will help me to find if each and every process of the project got completed as per the plan.
Critical Path Analysis
- Finding appropriate location
- Hiring the building
- Furnishing the building
- Securing SSI licence
- Purchase of freezers
- Recruiting staff and training
- Promotion
- Purchase of van
Every month there will be a meeting of all the project teams where each team will present a detailed report of their activities. The reports and the activities of the teams will be allowed open discussion wherein other members would provide their constructive criticisms and suggestions for improvement.
Risk Assessment
|
Risk |
Probability |
Impact |
Monitoring mechanism |
Monitored by |
|
Competition |
Very high |
Partially lose market | Regular market analysis and finding new customers | Manager and Marketing personnel |
| Insufficient availability of fish |
Likely |
May not be able to supply as per demand | Regular verification of stock |
Office boy |
|
Theft |
Likely |
Loss of property |
Insuring the office with all its equipments.
Regular checking of locks. Fixing a warning alarm |
Manager
Office secretary Office boy |
|
Fire |
Likely |
Loss of property |
Monitor the temperatures of freezers at every three hours so that its temperature does not go below 3 degree at any point of time |
Office boy |
| Power failure | Very likely | Fish may get rotten | Installing a power generator | Office secretary |
The risk assessment would enable me to foresee the possible challenges that may arise while the project in operation so that I can make necessary precautions.
However the success of the project depends upon how far the basic assumptions on which the project is built come true and the bank sanctioning the loan.