PROJECT ECONOMICS PROJECT REPORT ON ESTABLISHMENT OF A FAST FOOD JOINT IN ROHTAK SUBMITTED IN PARTIAL FULFILLMENT OF MASTER OF BUSINESS ADMINISTRATION

(BUSINESS ECONOMICS) (2008-2010)

SUBMITTED BYGUIDANCE OFSURUCHI ROLL NO 6040 MBA (B E) 3RD SEM

UNDER THE Dr. RAMPHUL

INTRODUCTION

A project is defined as a scientifically evolved work plan devised to achieve a specific objective with a specified period of time. The three basic attributes are a course of action, specific objectives and defined perspective. It should be amenable to planning, financing and implementation as a unit where both costs and returns are measurable. A well planned project includes a correct consideration of alternatives, identification of key issues, broad participation, compactness and enforceability. It should be clear cut, neat, and of course specific. The project is an important groundwork of an enterprise and is also very crucial to the entrepreneur. Invariably an entrepreneur cannot succeed in his venture. The concept of projects is intrinsically woven with all socioeconomic and cultural activities. I have made an attempt to develop a project plan of starting a fast food joint in Rohtak, Haryana. Basically its a service sector project and it is growing at a rapid pace in India. Fast food joint is not a common project in Rohtak. Its influenced by the western culture. Fast food joint is a place where people specially youth like to come and eat food along with some chat with their friends in a causal ambience.

The project involves the following feature in establishment of a new fast food joint. Technical I. II. III. IV. Location Layout Work schedule Government approval

Financial I. II. III. IV. V. Outlay of fixed assets Current assets Working capital Short and long term finance Bills

Economic

I. II. III.

Utility to society Employment generation Scope of area development

Financial viability I. II. III. Cost and benefits Risk characteristics Viability

Profitability I. II. Revenues, earnings Costs

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III.

Profits

Financial projection I. Sources and uses of funds

Socio economic desirability i. Social goal

ii.Desirability of the project from the larger social angel.

Technical features required to establish a coffee bar

i.

Location- the location of the projected fast food joint is sector 14 market. It would be in 800 sq. ft area. It is the posh locality in Rohtak, just nearby university and is a pollution free area away from highway. Fast food joint layout- layout should be effective. I will take help of architect to design it. The interior of the caf should be youth oriented and I will consult an interior designer for the same Work schedule- the fast food joint will be open from ten in the morning till eleven at night. Government approval- I will have to take the license from HUDA and other regularities to open the fast food joint.

ii.

iii.

iv.

Financial
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i.

Fixed assetsa. Land 800 sq ft.

b. building c. furniture d. machinery e. music system

ii.

current assets
a. well stocked inventory of food and other raw material

b. Cash in hand approx Rs 20000 to Rs 30000. c. Sound bank balance iii. Short and long term finance I will take loan from the bank for financial assessment and short term finance will be arranged through private financial institution. iv. Bills I have to pay the bills of electricity, water and building and sales tax.

Economic i. Utility to society It provides entertainment as well as recreational facility to the society . ii. Employment generation For the establishment of fast food joint we require human resource. For the successful operations of the fast food I require following staff: a) One manager
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b) One accountant c) 3 coffee makers d) 4 waiters e) One dish washer f) One security man

Feasibility

Financial viability: the project should be financially viable. If it is nonviable, the project cannot be started. It will remain mere idea.

i.

Cost and benefits: The joint will require approximately Rs 50 lakh capital to establish it. Out of which 25 % investment will be mine and the rest , I will take a loan from the bank and private institutions Risk characteristics: Every project possesses some risks. In this project the first risk is the social acceptance of a fast food joint among the society. It will be a new concept in Rohtak.

ii.

Profitability

The project financial viability will be useless if the project is not profitable.

i.

Revenues, earnings: The population of Rohtak is around 10 lakh and per person income is also high. Due to rising living standards people here are demanding higher services along with quality products for which they are ready to shell out more, thus making the project to generate good profits.

ii.

Breakeven level: The break even analysis will help out us to establish the level of output which evenly breaks the costs and revenues. The break even point in terms of sale of the fast food joint can be measured through this formula

BEP= fixed costs/total contribution total amount of sales (Total sales total variable costs total contribution)

Financial projections Financial projection is an important part of the project. It helps out the entrepreneur to take the approval of the loan from the banks and the approval of the project from the government.

i.

Performa balance sheet: It shows the input into the organization and output of the organization through various channels like sales, purchase, creditors record liability. It helps out various stock holder of the project. It helps out the bank to the decision regarding the loan approval. Sources and use of fund: the sources of fund for the fast food joint are: a) Self generated funds b) Funds from the bank and other financial institutions

ii.

These funds are used for the payment of the bills and to purchase the required assets of the caf. Socio economic desirability: It is an essential feature taken into consideration for the successful projection of the project because society is also interested to know the benefits of the project.

a) Social goals: Social goal of the fast food joint is to provide

entertainment and recreational place.

b) Desirability of the project from the larger social angel : While

designing the project, the youth and the upper middle class family has been taken into consideration.

CONCLUSION

On the above given references we can say that this project is financially and technically feasible. It will definitely generate the expected amount of revenue because it is youth oriented project and designed to attract the fun loving people. After the inauguration of the fast food, within 4-5 years I will be able to open the branches at other places.