Introduction

Business plan
Karzey Diary Paneer production business is a manufacturing business plant that would produce
and supply locally produced Paneer. Paneer is a South Asian variety of soft cheese obtained by
acid and heat coagulation of milk. It is a rich source of animal protein available at a comparatively
low cost and forma an important source of protein for vegetarians.

Paneer production business will be carried out by a team of five members in partnership
contributing equal capital contribution and effort. The business follows Line Organizational
structure where there is Direct vertical relationship having full freedom to departmental heads
carrying out simple operation system with direct instruction to subordinates.

The location of business outlet will be in Paro since there are plenty of resources. We are going to
sell the products to retailers and wholesalers and it won’t be any trouble to sell the paneer as
targeted customers are from Paro and Thimphu. The majority of the customers are resorts, hotels,
and grocery stores and moreover it will be more cost effective to locate in Paro than in Thimphu
because expenses for collecting raw material (milk) will be lower because Paro has more farmers
raising livestock farm.

The goals of starting this production business to:

 To supply individuals with nutritious and high-quality dairy products and services.
 To minimize Paneer imports into the country and contribute to the country's economic
development.
 To expand and export the product to neighboring country India as there is high demand for
the products.
Marketing plan
The products of the Paneer Production business will be sold to its potential customers through
online as well as physical store services. Followings are some aspects covered under marketing
plan of Paneer Production business.

Market Segment
Segment Features
1. Resorts and Hotels Resorts and Hotels at stunning location which attracts more
tourist and customers.
2. Grocery stores Giant grocery stores whose sales and income is high.
3. Individual customer All different age group and income group.

Demand Analysis Table

Potential
Usage rate Quality demanded
buyers and
(monthly) (yearly)
Location numbers
Value
Volume Volume Value ($)
($)
Thimphu (Hotels, Resorts, &
480 10,000 250 120,000 30,000,000
Grocery shops)
Paro (Hotels, Resorts, &
60 5,000 250 60,000 15,000,000
Grocery shops)
Total 500 180,000 45,000,000

Thimphu
As per our study it was shown that there was about 480 potential hotels, resorts, and grocery
shops in Thimphu. We have assumed that the hotel, resort and grocery shops in Thimphu will buy
around 10,000 numbers of Paneer each month since, more than 12.55% of total population lives
in Thimphu.

Paro
As per our study it was shown that there was about 60 potential hotel, resort, and grocery shops
in Paro. We have assumed that the hotel, resort, and grocery shop in Paro will buy around 5,000
numbers of Paneer each month since, due to pandemic there is a smaller number of tourist and
there is less numbers of population lives in Paro compared to Thimphu.
Competitor analysis
Competitor analysis table
Competitor products and pricing and strategy promotion distribution
strategy
Other than paneer, 0.5 Kg paneer  Advertising  Deliver as and
1. Choling
other products like was sold for $ 250  Personal when ordered.
Yargay
Yogurt, Cheese, and Selling  Personal selling
Detsen
Butter, and Ice 1 kg paneer was  Sales
Cream are sold for $ 400
produced. Capital
intensive.
Products and Price:  Advertising  Online
2. Bhutan
strategy: Cheese,  250 per half Kg  Personally delivering
Milk and
 400 per Kg.  Personal selling
Agro(P)
Pouch, yogurt, Strategies:
Limited
paneer, and implemented
beverages under the pricing
brand strategies used
by Tetra Laval
name Group, the world's
“DEWFRESH". leader and largest
Capital intensive. manufacturer
and supplier of
packing materials
for milk and
other liquid food
products.

Marketing mix and strategies

Product Strategies
Our business produces Paneer which is sold in nearby dzongkhags and locality. We will provide
good quality Paneer using natural ingredients at reasonable price so that customers can ensure
their health safety with proper hygiene.
 1. Product Variety

Sl. No Name of the product

1. Paneer

2. Quality of product

 Marble white color, nutty flavor, spongy body with smooth texture.

 Organic and nutritious

 Best before 6 months from the time of manufacturing.

3. Design of the product

Features
 Ideal food for diabetic patients.
 Builds better bones, teeth and immune system.
 Other nutritional information are as follows:

Nutritional values Paneer

Protein 6.1 g
Carbohydrates 5g
Fats 4.3 g
Calories 104
Fiber 0
 4. Brand name: Karzey Diary (Cottage cheese)
5. Packaging
 We will use polythene bags or parchment lined paper board boxes so that we can
increase the shelf life of the paneer.

6. Size of the product

 Smaller in size i.e., 1 kg tin and half kg tin and also in square shape like Amul
butter and block cheese.

7. Our services
 Consumers can order online and will deliver our product.
 Our product will be easily available in every grocery, wholesalers and retailers.

Distribution strategies

Self-Distribution for Local Sales

If we only sell our products locally, we can usually distribute them by ourselves, through our
own vehicles and personnel. If we distribute our own products, we don't have to pay
middlemen such as wholesalers, distributors, or agents, and we get to keep the entire
wholesale purchase price. Depending on the volume we sell and the volume we eventually
intend to sell, the cost of self- distribution may be lower than the cost of marking down our
wholesale price to make room for a distributor's markup.

Wholesalers and Distributors

When we work with wholesalers and distributors, we'll just need to deliver our product to one
central location rather than to each individual store. We will let the wholesalers do the basic
legwork of getting our product from place to place and invoicing customers, while distributors
are also involved in the marketing side of the equation. Because distributors are more involved
in sales, they place a higher markup on our products: 25 to 30 percent for distributors versus
10 to 20 percent for wholesalers.

If we work with a wholesaler, we should be prepared to do our own marketing. This will include
convincing retailers to buy our products from the wholesaler and then convincing customers to
buy our products from retailers through advertising and point of purchase marketing.

Promotion strategies

Today, social media marketing plays a vital role in advertising our products and services. Of all
the social media marketing tools, Facebook marketing has a wide reach of audiences. Whether
you run a big business or selling a product, Facebook marketing is a great way to stay
connected and interact with the world around us. Therefore, we will use Facebook marketing to
promote our products by creating and actively using a Facebook page as a communications
channel to maintain contact and attract customers.

We will also advertise our product through local TV channels to inform our target customers
about our product and to persuade them to buy our products.
Pricing Strategy

The price of the product is determined considering the cost incurred to manufacture the
product. Moreover, the price is based on the price of the competitors where we try our best to
sell our product at a lesser price compared to competitors.

Environmental Management Plan

Milk is the only material needed for the production of Paneer for our Karzey Diary Business.

Followings are the equipment’s required for Karzey Diary Business:

Sl. Description of Specification Quantity

No assets
Dell inspiron 5418 intel i5- 11300H 14 inches
1. Laptop FHD display laptop 5
(16GB/512GB SSD/
integrate graphics/ windows 10+FPR/
silver color) D560481WIN95,
1.43kg
2. Chairs Phoenix steel chair 4
3. Tables Single seater workstation 4
1536*1236*1220mm
4. Carpet Low pile, short fiber 1
5. Water filter Micro pure Ro filter 1
6. Paneer press Capacity-40 kg Brand- SB solution 1
machine Orientation- Horizontal
Material- stainless steel Voltage- 220 to 380V
7. Paneer making Machine Body Material: Stainless steel 1
machine Capacity: 120 Liter Usage/Application: Paneer
and Khoya (Mawa) making
Equipment Type: Paneer Coagulation Tank
Material: Stainless Steel Automation Grade:
Automatic
8. Vacuum Weight: 85 kg machine, Type: 1
Packing Machine Automatic Voltage: 280V, sealing power: 500 Watt
9. Refrigerator Panasonic NRBS60MHX1 584Ltr 1
Side by Side Refrigerator
 10. Cutting machine Brand Name: MACH ENGINEERING 1
Weight: 35.00 Kilogram
1 Pack Contains: 1 Minimum Pack Size: 1
11. Fire safety box safe and lock box-safe box, safes and lock boxes, 1
money box, safety boxes for home, digital safe
box, steel alloy drop safe, includes
keys- Serene Life SLSFE14

Operating plan
Production process:

Milk is received in a clean and sterilized Stainless Steel. Milk is standardized for Fat. Then milk
is heated to 85–90-degree Celsius and hold it for 5 minutes, maintaining the same
temperature. This process is also known to as batch pasteurization. Purpose of batch
pasteurization is to reduce the microbial load. Temperature of the pasteurized milk is then
brought down to 70 degrees Celsius.

Prepare 1% citric acid solution with respect to the milk, which is used as a coagulant. The
temperature of coagulant is maintained at 70-degree Celsius, which is same as the
temperature of milk at the time of addition of coagulants.
The coagulant is added in optimum quantity and stir them slowly, so that a clear whey
separation shall be achieved. The green color of the whey indicates proper coagulation. Stirring
should not be intense otherwise this will lead to break up of curd mass.

Once the pH of whey reached in the range of 5.7 to 6.0, allow the curd mass to be settle for
about 5 - 10 minutes. Allow the whey to be drained out through a muslin cloth and the
coagulated curd remains in the vat/cloth. It is advised that the whey temperature should not fall
below 63-degree Celsius during the whole process.

The curd mass shall be filled in the Stainless-steel hoops lined with muslin cloth and pressed
for 15- 20 min. Pressing can be achieved through a manual press or pneumatic press.

Immersed the pressed Paneer blocks in chilled water (4- 6 Degree Celsius) or 5% brine
solution (4- 6%) for 2 - 3 hours to achieve firmness. Further the Paneer blocks were cuts and
dried to remove extra free water.

The major sources of the raw materials for our business would be from people who own
livestock farm in the Paro region. To ensure the availability of raw material throughout the year
we will setup a good connection with the suppliers and make them partners instead of simply
having them follow set instruction and keeping them informed about our expectation and their
progress.

Financial plan (sources of capital/equity)

The total initial capital requirement for the business amounts approximately $ 9.5 million
including fixed investments, pre-operating expenses and the working capital required. The
founding members have decided to contribute $ 1 million capital each as equity and the
remaining to be obtained loan from the financial institution. In the event that our firm is unable
to repay the loans within the specific time period set by the financial institution, we will hold the
non-current assets of the company as a mortgage for loan security. The company's non-current
assets, which will serve as a guarantee of the repayment guarantee to the banking institution,
BDBL. The non-current assets of our firm would be used to recover any debt default by our
company.
Financial plan (projected financial performance)

Karzay Dairy Paneer Production

Description Amount
Business loan of 10% interest rate $40,000.00
Start-up Expenses (cash):
Business plan preparation $300.00
Development of prototype $400.00
Business registration $302.00
Loan application and approval $28.00
Purchase and installation of machineries $400.00
Purchase and installation of office equipment $400.00
Availing building services on rental $200.00
Recruitment of labors $200.00
Total start-up cost $2,230.00
Ending balance after start-up cost $37,770.00

Sales Budget
February March April Total
Sales Budget
Budgeted sales of Paneer (units) 2,000 2,500 3,000 7,500
Budgeted selling price per unit ($) $3.00 $3.00 $3.00 $9.00
Budgeted total sales revenue $6,000.00 $7,500.00 $9,000.00 $22,500.00
Total cash collection $6,000.00 $7,500.00 $9,000.00 $22,500.00

Purchases Budget
February March April Total
Budgeted sales of Paneer (units) 2,000 2,500 3,000 7,500
Add: Desired Ending Inventory of Paneer 100 100 100 300
Total set of inputs required 2,100 2,600 3,100 7,800
Less: Beginning Raw materials of Paneer - 100 100 200
Total Purchases required 2,100 2,500 3,000 7,600
Purchase cost for 1 tin of Paneer $2.00 $2.00 $2.00 $6.00
Total Budgeted all Purchase Cost $4,200.00 $5,200.00 $6,200.00 $15,600.00
Cash payments for purchase: $2,100.00 $2,600.00 $3,100.00 $7,800.00
Allowed to pay 50% of material costs in the next month
 Selling Expenses Budget
February March April Total
Selling Expense:
Salaries of marketing manager $400.00 $440.00 $480.00 $1,320.00
Salaries of sales agent $180.00 $200.00 $240.00 $620.00
Driver’s salaries $140.00 $160.00 $180.00 $480.00
Helper salaries $140.00 $160.00 $200.00 $500.00
Commission $20.00 $26.00 $30.00 $76.00
Maintenance of fixed assets $80.00 $86.00 $90.00 $256.00
Fuel $30.00 $34.00 $40.00 $104.00
Miscellaneous expenses $12.00 $16.00 $20.00 $48.00
Advertisement expenses $40.00 $46.00 $52.00 $138.00
Total Budgeted selling expense $1,042.00 $1,168.00 $1,332.00 $3,542.00
Selling expenses cash payments: $1,042.00 $1,168.00 $1,332.00 $3,542.00

Administrative and General Expenses

February March April Total
Salary $1,270.00 $1,270.00 $1,270.00 $3,810.00
Stationery and other office supplies $28.00 $28.00 $28.00 $84.00
Electricity $126.00 $126.00 $126.00 $378.00
Repairs and maintenance $4.00 $4.00 $4.00 $12.00
Miscellaneous $14.00 $14.00 $14.00 $42.00
Total Budgeted General & Admin Expense $1,442.00 $1,442.00 $1,442.00 $4,326.00

Cash Budget
February March April Total
Cash Flow from Operating activities:
Cash receipt from sales: $6,000.00 $7,500.00 $9,000.00 $22,500.00
Loan from Bank $40,000.00 $40,000.00
Total Receipts $46,000.00 $7,500.00 $9,000.00 $62,500.00
Cash payments for:
Purchases $2,100.00 $2,600.00 $3,100.00 $7,800.00
Selling Expenses $1,042.00 $1,168.00 $1,332.00 $3,542.00
General & Admin Expenses $1,442.00 $1,442.00 $1,442.00 $4,326.00
Total Payments $4,584.00 $5,210.00 $5,874.00 $15,668.00
Net cash inflow (outflow) from $41,416.00 $2,290.00 $3,126.00 $46,832.00
operations
Add: beginning cash balance $37,770.00 $79,186.00 $81,476.00 $198,432.00
Ending cash Balance from Operation $79,186.00 $81,476.00 $84,602.00 $245,264.00
Projected profit and loss account
Profit and Loss Account
Particulars February March April
Revenue from sale of Paneer $6,000.00 $7,500.00 $9,000.00
Total Revenue $6,000.00 $7,500.00 $9,000.00
Cost of goods sold $4,200.00 $5,200.00 $6,200.00
Gross profit $1,800.00 $2,300.00 $2,800.00
Expenses:
Selling Expenses $1,042.00 $1,168.00 $1,332.00
Administrative and general expenses $1,442.00 $1,442.00 $1,442.00
Earning Before Tax $2,200.00 $2,574.00 $2,910.00
Tax (25%) $550.00 $643.50 $727.50
Net income $1,650.00 $1,930.50 $2,182.50

Projected balance sheet

Balance Sheet
Particulars February March April
ASSETS
Current assets:
Inventory $300.00 $300.00 $300.00
Cash in Hand $79,186.00 $81,476.00 $84,602.00
Non-current assets:
Equipment $800.00 $796.67 $793.33
Less: Accumulated dep. $3.33 $3.33 $3.33
Total assets $80,282.67 $82,569.33 $85,692.00
LIABILITIES+EQUITY
Current Liabilities:
Accounts Payable $2,100.00 $2,600.00 $3,100.00
Non-current liabilities:
Loan from bank $40,000.00 $40,000.00 $40,000.00
Equity:
Share capital
Retained earning $1,650.00 $1,930.50 $2,182.50
Reserve and surplus $36,532.67 $38,038.83 $40,409.50
Total Liabilities + Equity $80,282.67 $82,569.33 $85,692.00
Percentage changes between two months in PL account and balance sheet
Profit and loss account
Profit and Loss Account
Particulars February March Changes (%)
Revenue from sale of Paneer $6,000.00 $7,500.00 20.00%
Total Revenue $6,000.00 $7,500.00 20.00%
Cost of goods sold $4,200.00 $5,200.00 19.23%
Gross profit $1,800.00 $2,300.00 21.74%
Expenses:
Selling Expenses $1,042.00 $1,168.00 10.79%
Adm and general expenses $1,442.00 $1,442.00 0.00%
Earning Before Tax $2,200.00 $2,574.00 14.53%
Tax (25%) $550.00 $643.50 14.53%
Net income $1,650.00 $1,930.50 14.53%

Balance sheet
Balance Sheet
Particulars February March Changes (%)
ASSETS
Current assets:
Inventory $300.00 $300.00 0.00%
Cash in Hand $79,186.00 $81,476.00 2.81%
Non-current assets:
Equipment $800.00 $796.67 -0.42%
Less: Accumulated dep. $3.33 $3.33 0.00%
Total assets $80,282.67 $82,569.33 2.77%
LIABILITIES+EQUITY
Current Liabilities:
Accounts Payable $2,100.00 $2,600.00 19.23%
Non-current liabilities:
Loan from bank $40,000.00 $40,000.00 0.00%
Equity:
Share capital
Retained earning $1,650.00 $1,930.50
Reserve and surplus $36,532.67 $38,038.83 3.96%
Total Liabilities + Equity $80,282.67 $82,569.33 2.77%

Worksheet showing transaction occurring in first two month

Hypothetical for the month of February
Sl. No. Particulars
1 Loan from financial institution amounting to $ 2,000,000 for
purchase of non-current assets.
 2 Purchased non-current assets worth $ 40,000 for production and
office purpose
3 Purchased supplies of $ 210,000
4 Paid salaries of $ 43,000 which includes payment to marketing
manager, agent, drivers and helper
5 Paid commission of $1,000
6 Paid maintenance of fixed assets and fuel expenses of $ 4,000
and $ 1,500 respectively
7 Sales revenue received $ 300,000
8 Paid administrative expenses of $ 72,100

Assets Liabilities + Equity

Sl. No. Cash Fixed supplies loans capital revenue expenses
assets
1 60,000 60,000
2 -40,000 40,000
3 -210,000 210,000
4 -43,000 43000
5 -1000 1000
6 -5500 4000 1500
7 300,000 300,000
8 -72,100 72,100

Hypothetical for the month of March

Sl. No. Particulars

1 Maintenance of machineries $ 4,300
2 Purchased supplies of $ 260,000
3 Paid salaries of $ 48,000 which includes payment to marketing
manager, agent, drivers and helper
4 Paid commission of $1,300
5 Paid fuel expenses of $ 1,700
6 Sales revenue received $ 375,000
 7 Paid administrative expenses of $ 72,100

Assets Liabilities + Equity

Sl. Cash Fixed assets Supplies Capital Revenue Expenses
No.
1 -4,300 4,300
2 -260,000 260,000
3 -48,000 48,000
4 -1,300 1,300
5 -1,700 1,700
6 375,000 375,000
7 -72,100 72,100

Ratio Analysis

Liquidity ratio

Current ratio

Current assets
Current ratio=
Current liabilities

6,996,072
¿
0

¿ 6,996,072

Quick ratio

Quick assets
Quick ratio=
Current liabilities

6,996,072
¿
0

¿ 6,996,072

Working capital to sales

 Working capital
Working capital ¿ sales=
Gross sales

6,996,072−0
¿
8,000,000

¿ 0.874

Profitability

Return on equity

Operating profit
Returnon equity=
capital employed

419,751
¿
5,000,000

¿ 0.084

Return on sales

Operating profit
Returnon sales=
Sales

419,751
¿
8,000,000

¿ 0.052

Operating capacity

Financial flexibility

Term debt to total fixed assets

Long term debt

Term debt ¿ total ¿ assets= assets ¿
Total ¿

4,247,266
¿
2,252,571
 ¿ 1.885

Debt equity ratio

Debt
Debt equity ratio=
(Capital+ Reserve∧Surplus)

4,247,266
¿
5,000,000

¿ 0.850
Master budget or Cost sheet

Particulars Year 1

Direct Materials 4,120,000

Direct Labour 390,000

Direct (or Chargeable) Expense 36,000

Prime Cost 4,546,000

Factory Overhead 589,339

Factory Cost/Work Cost 5,135,339

Office and Administration overheads 1,192,529

Cost of Production 6,327,868

Selling and Distribution overheads 1,093,783

Total Cost or Cost of Sales 7,421,651

Profit 578,349

Sales 8,000,000