Modeel Detailled Project Rep

port

FRO
OZEN CHICKE
C EN UNIIT
Undeer the Forrmalization of Micrro Food Processing
P g Enterpriises Schem
me
(
(Ministry of Food Processing
P g Industriies, Goverrnment off India)

Preepared by

Indian Institute of Food Processin

P ng Technoology (IIF
FPT)
Pudukkkottai Roadd, Thanjavuur, Tamil Nadu
N
Ministrry of Foodd Processinng Industriees, Governnment of Inndia
 Index

S No. Topic Page

Number

1. The Project At a Glance 3

2. About the Project 4-17
2.1. Frozen Chicken Unit 4
2.2. Raw Material Requirements 4
2.3. Technology 4
2.4. Market Demand and Supply 5
2.5. Marketing Strategy 5
2.6. Manufacturing Process 5-7
2.7. Basic Project Assumptions 8
2.8. Fixed Capital Investment 8
2.8.A. Land & Building 8
2.8.B. Machinery & Equipment 8
2.8.C. Other Fixed Assets 9
2.8.D. Total Fixed Capital Investment 9
2.9. Working Capital Requirement 9
2.10. Total Project Cost and Means of Finance 10
2.11. Manpower 10
2.12. Financial Analysis 11-13
2.13. Depreciation Schedule 14
2.14. Repayment Schedule 15
2.15. Financial Ratios 16
2.16. Break Even Point Analysis 17
3. Limitations of the Model DPR and Guidelines for Entrepreneurs 18-19
3.1. Limitations of the Model DPR 18
3.2. Guidelines for the Entrepreneurs 18-19
+
 1. The Project at a Glance

1. Name of the proposed project : Frozen Chicken Unit

2. Name of the
entrepreneur/FPO/SHG/Cooperative :
3. Nature of proposed project : Proprietorship/Company/Partnership
4. Registered office :
5. Project site/location :
6. Names of Partner (if partnership) :
7. No of share holders (if company/FPC) :
8. Technical advisor :
9. Marketing advisor/partners :
10. Proposed project capacity : 75000 Kg/annum(60,65,70,75,&80% capacity
utilization in 1st to 5th Year respectively)
11. Raw materials : Poultry Bird (Chicken) and Packing material
12. Major product outputs : Frozen Chicken
13. Total project cost : Rs. 31.35 Lakh
 Land development, building & civil : Nil
Construction
 Machinery and equipments : Rs. 24.78 Lakh
 Other Fixed Assets : Rs. 3.00 Lakh
 Working capital margin : Rs. 2.46Lakh
 Contingencies : Rs. 1.11 Lakh
14. Working capital requirement Rs. 7.37 Lakh
15. Means of Finance
 Subsidy grant by MoFPI (max 10 : Rs. 10.00 Lakh
lakhs)
 Promoter’s contribution (min 20%) : Rs. 8.85 Lakh
 Term loan (45%) : Rs. 12.5 Lakh
16. Debt-equity ratio : 1.01
17. Profit after Depreciation, Interest & Tax
st
 1 year : 3.17 Lakh
nd
 2 year : 5.15 Lakh
rd
 3 year : 7.43 Lakh
th
 4 year : 9.81 Lakh
 5th year : 12.73 Lakh
18. Average DSCR : 2.97
19. Term loan repayment : 5 Years with 6 months grace period

3
 2. About the Project

2.1. Frozen Chicken Unit

Poultry meat is one of the most important sources of protein for human consumption worldwide.
Chicken is the most common type of poultry in the world. Owing to the relative ease and low
cost of raising them in comparison to animals such as cattle or hogs, chickens have become
prevalent throughout the cuisine of cultures around the world, and their meat has been variously
adapted to regional tastes. Chicken can be prepared in a vast range of ways, including baking,
grilling, barbecuing, frying, and boiling, among many others, depending on its purpose. Since
the latter half of the 20th century, prepared chicken has become a staple of fast food. Chicken is
sometimes cited as being more healthful than red meat, with lower concentrations of cholesterol
and saturated fat. The poultry farming industry that accounts for chicken production takes on a
range of forms across different parts of the world.
2.2. Raw Material Requirements

Basic raw material that is used is mentioned below:

 Poultry Bird (Chicken)
 Packaging material

2.3.Technology

IIFPT has all the advanced technical know on Frozen Chicken Unit with respect to specific
parameters’ for getting good quality standards. These technologies are available through
consultancy.

4
2.4. Market Demand and Supply

Indian poultry meat products have good markets in Japan, Malaysia, Indonesia, and Singapore.
Both public and private sector organizations have played important role in the poultry industry.
There is a huge scope for the growth of the poultry industry as the country's annual per capita
consumption is only 2.4 kgs. The national institute of nutrition has recommended 180 eggs and
11 kg of meat per capita consumption for our country. Nearly three million tonnes of broiler
meat and about 2.86 million tonnes of eggs are produced annually in India. Growing at about 20
per cent annually the domestic poultry market is currently estimated at about Rs. 49,000 crore.
India is the ninth-largest producer of poultry meat in the world.

2.5. Marketing Strategy

The increasing urbanization and income offers huge scope for marketing of Frozen Chicken.
Urban organized platforms such as departmental stores, malls, super markets can be attractive
platforms to sell well packaged and branded frozen chicken. Processors can also have tie-up
with hotels, caterers and restaurants for supply.

2.6. Manufacturing Process

 Receiving & Handling: Birds are usually transported to the processing plant in crates
stacked on a truck or in cages mounted permanently on a truck. It goes without saying that
transporting vehicles and crates should be kept in a clean, hygienic, and safe manner.
 Stunning: In plants where gas stunning is employed, the birds can be left in the crates,
where they are stunned by the selected gas, and later removed from the crates. In the case of
poultry, stunning can be done using an electric current, gas, or mechanical means.
 Killing & Bleeding: After being stunned, general slaughter procedures are used to
exsanguinate broilers. One method consists of cutting both the jugular and carotid arteries in
the neck, to ensure rapid death. The duration of bleeding depends on the stunning method
applied and the time elapsing between stunning and bleeding. If electric stunning is used,
5
 40% of blood is eliminated in 60 to 90 seconds, while after gas stunning the bleeding period
must be increased to 2 to 2.5 min.
 Scalding: Scalding softens the skin and facilitates plucking. The tail feathers, remnant
feathers, and skin colors are the most important items for further processing. Two types of
scalding system can be used: hot-water scalding or steam scalding.
 Feather removal: Birds should be plucked immediately after scalding. In large processing
plants, feather removal is done by mechanical pickers or puckers equipped with rubber
fingers that rub the feathers off the carcass. In a continuous operation, this is done while the
carcass is hanging upside down and moved forward (by the shackle line) between two or
three sets of rotating disks equipped with rubber fingers.
 Head removal: After defeathering and before evisceration, the head must be removed if
decapitation was not used as the killing method. Automatic machines remove the head,
esophagus, and trachea, an essential stage for subsequent automatic evisceration.
 Lung removal: Lungs can be removed manually or by automated equipment. The lungs
must be cut at the tarsus joint, and it is important that the cut be made between the bones
and not through a bone since the latter will appear dark or red in a chilled bird and almost
black in a cooked product. After removal of the legs, the carcasses are usually moved to
another line. This can be done manually as the carcasses fall onto a sorting table, or by
automatic transfer.
 Evisceration: This stage refers to opening the body cavity and withdrawing the viscera (i.e.,
intestines, gizzard, gallbladder, and crop). Different operations form part of evisceration:
 Repositioning on the conveying line,
 Cutting the neck skin,
 Cutting the cloaca,
 Opening the abdominal cavity, and
 Withdrawing the viscera.
This can be done manually, semi-automatically or fully automatically. In all cases, special
care should be taken not to pierce the viscera and contaminate the carcass.
 Post washing: Prior to refrigeration, a final internal and external washing of the carcass is
necessary to remove debris and blood or fat clots. The remaining material in the intestinal crop
6
 due to problems during evisceration may also mean that the carcass must be washed.
 Chilling and freezing: Blast freezing uses high-velocity cold air circulated by fans to provide
rapid air movement. The rate of heat transfer is greatly improved over that of still air, and the
freezing rate is higher. Air velocities commonly used in a commercial air-blast freezer can
range from 30 to 1100 m/min, and the temperature can range from −10 to −40◦c.
 Storage: The finished product is stored and ready for sale in the market.
Flow Chart of Frozen Chicken

Receiving & Handling

Stunning

Killing & Bleeding

Scalding

Feather release

Head removal

Lung removal

Evisceration

Post-washing

Chilling or frozen

Storage

7
2.7. Basic Project Assumptions
Capacity of Frozen Chicken Unit : 75000 Kg/annum

Working hours per day : 8-10 hrs.

Working days per year : 300 days.
Interest on capital investment : 11% on term loan and working capital loan.

Repayment period : Five years with six months grace period is considered.
Utilization of capacity : 60% 1st year, 65% in 2nd year, 70% in 3rd year, 75% in
4th year & 80% 5th year onwards

Average prices of raw material : Rs. 120/Kg.

Average sale price : Rs 220/Kg.

2.8. Fixed Capital Investment

2.8.A. Land & Building

The DPR is for FME scheme to upgrade/formalize existing micro enterprises which
already has land & built-up area. However, they can invest to expand the built-up area as
required.

2.8.B. Machinery & Equipment: Following machinery and equipments are used:

Description Rate Unit Amount

Chicken Cutting Machine 30000 1 30000
Chicken Scalding Tank 33000 1 33000
Chicken Feather cleaning 22000 1 22000
machine
Chicken Head Puller 55000 1 55000
Blast Freezer 850000 1 850000
Cold Chamber 460000 1 460000
Vacuum Packaging machine 400000 1 400000
Other Equipments (washing - - 250000
tanks, hook conveyor, knife,
trolley, bins, etc.)
Total Amount 2100000
GST @ 18% 378000
Net Amount 2478000
8
 2.8.C. Other Fixed Assets:
i. Furniture and Fixtures Rs. 3.0 Lakh
ii. Computer & Printers
iii. Electrical fittings

2.8.D. Total Fixed Capital Investment (A+B+C): Rs. 27.78 Lakh

2.9. Working Capital Requirement

Working capital is critical input in Frozen Chicken unit.

COMPUTATION OF CLOSING STOCK & WORKING CAPITAL

PARTICULARS I II III IV V

Finished Goods
(15 Days requirement) 4.95 5.73 6.56 7.45 8.40
Raw Material
(15 Days requirement) 2.70 3.05 3.41 3.80 4.20

Closing Stock 7.65 8.78 9.98 11.25 12.60

COMPUTATION OF WORKING CAPITAL REQUIREMENT

Particulars Amount Margin(25%) Net

Amount
Stock in Hand 7.65
Less:
Sundry Creditors 2.52
Paid Stock 5.13 1.28 3.85

Sundry Debtors 4.70 1.18 3.53

Working Capital Requirement 7.37

Margin 2.46

MPBF 7.37
Working Capital Demand 7.37

9
 2.10. Total Project Cost and Means of Finance

Particulars Amount (Rs. in Lakhs)

i. Land and building Nil
ii. Plant and machinery 24.78
iii. Other Fixed assets 3.00
iv. Working capital margin 2.46
v. Contingencies 1.11
Total project cost (i to v) 31.35
Means of finance
i. Subsidy 10.00
ii. Promoter’s contribution 8.85
iii. Term loan 12.50
Total Means of Finance(i to iii) 31.35

2.11. Manpower:

BREAK UP OF LABOUR

Particulars Wages No of Total

Per Month Employees Salary
Supervisor 20,000.00 1 20,000.00
Machine Operator 13,000.00 3 39,000.00
Skilled/Unskilled Worker 11,000.00 4 44,000.00
Helper 8,000.00 3 24,000.00
1,27,000.00
Add: 10% Fringe Benefit 12,700.00
Total Labour Cost Per Month 1,39,700.00
Total Labour Cost for the year ( In Rs. Lakhs) 11 16.76

BREAK UP OF SALARY

Particulars Salary No of Total

Per Month Employees Salary
Accountant cum store keeper 20,000.00 1 20,000.00
Sales 18,000.00 2 36,000.00
Total Salary Per Month 56,000.00
Add: 5% Fringe Benefit 2,800.00
Total Salary for the month 58,800.00

Total Salary for the year ( In Rs. Lakhs) 3 7.06

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2.12. Financial Analysis:

PROJECTED BALANCE SHEET

PARTICULARS I II III IV V

SOURCES OF FUND
Capital Account
Opening Balance - 21.02 24.68 28.11 31.41
Add: Additions 8.85 - - - -
Add: Net Profit 3.17 5.15 7.43 9.81 12.73
Less: Drawings 1.00 1.50 4.00 6.50 9.50
Subsidy/Grant 10.00 - - - -
Closing Balance 21.02 24.68 28.11 31.41 34.65
CC Limit 7.37 7.37 7.37 7.37 7.37
Term Loan 11.11 8.33 5.56 2.78 -
Sundry Creditors 2.52 2.84 3.19 3.54 3.92
TOTAL : 42.03 43.23 44.22 45.11 45.94

APPLICATION OF FUND

Fixed Assets ( Gross) 27.78 27.78 27.78 27.78 27.78

Gross Dep. 0.94 2.08 3.39 4.88 6.55
Net Fixed Assets 26.84 25.70 24.39 22.90 21.23

Current Assets
Sundry Debtors 4.70 5.71 6.54 7.43 8.37
Stock in Hand 7.65 8.78 9.98 11.25 12.60
Cash and Bank 2.84 3.05 3.32 3.53 3.74

TOTAL : 42.03 43.23 44.22 45.11 45.94

11
PROJECTED PROFITABILITY STATEMENT

PARTICULARS I II III IV V

A) SALES
Gross Sale 94.05 114.12 130.78 148.57 167.48

Total (A) 94.05 114.12 130.78 148.57 167.48

B) COST OF SALES

Raw Material Consumed 54.00 60.94 68.25 75.94 84.00

Elecricity Expenses 3.36 3.64 3.92 4.20 4.48
Repair & Maintenance 5.64 6.85 7.85 8.91 10.05
Labour & Wages 16.76 18.61 22.33 26.35 30.56
Packing & other overheads 0.94 1.14 1.31 1.49 1.67
Cost of Production 80.70 91.17 103.65 116.88 130.76

Add: Opening Stock /WIP - 4.95 5.73 6.56 7.45

Less: Closing Stock /WIP 4.95 5.73 6.56 7.45 8.40

Cost of Sales (B) 75.75 90.39 102.82 115.99 129.82

C) GROSS PROFIT (A-B) 18.30 23.73 27.96 32.57 37.66

19.45% 20.79% 21.38% 21.93% 22.49%
D) Bank Interest (Term Loan ) 1.36 1.11 0.80 0.50 0.19
ii) Interest On Working Capital 0.81 0.81 0.81 0.81 0.81
E) Salary to Staff 7.06 8.47 9.74 11.20 12.32
F) Selling & Adm Expenses Exp. 1.88 4.56 5.49 6.24 6.70
G) Depreciation as per Schedule 4.02 3.43 2.93 2.50 2.14
TOTAL (D+E+F+G) 15.12 18.38 19.77 21.25 22.16

H) NET PROFIT 3.17 5.35 8.19 11.33 15.50

3.4% 4.7% 6.3% 7.6% 9.3%
I) Taxation - 0.19 0.76 1.52 2.77

J) PROFIT (After Tax) 3.17 5.15 7.43 9.81 12.73

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PROJECTED CASH FLOW STATEMENT

PARTICULARS I II III IV V

SOURCES OF FUND
Own Contribution 8.85 -
Reserve & Surplus 3.17 5.35 8.19 11.33 15.50
Depriciation & Exp. W/off 0.94 1.14 1.31 1.49 1.67
Increase In Cash Credit 7.37 - - - -
Increase In Term Loan 12.50 - - - -
Increase in Creditors 2.52 0.32 0.34 0.36 0.38
Subsidy/Grant 10.00 - - - -

TOTAL : 45.36 6.81 9.84 13.17 17.55

APPLICATION OF FUND

Increase in Fixed Assets 27.78 - - - -

Increase in Stock 7.65 1.13 1.20 1.28 1.35
Increase in Debtors 4.70 1.00 0.83 0.89 0.95
Repayment of Term Loan 1.39 2.78 2.78 2.78 2.78
Taxation - 0.19 0.76 1.52 2.77
Drawings 1.00 1.50 4.00 6.50 9.50
TOTAL : 42.52 6.60 9.57 12.96 17.34

Opening Cash & Bank Balance - 2.84 3.05 3.32 3.53

Add : Surplus 2.84 0.21 0.27 0.21 0.21

Closing Cash & Bank Balance 2.84 3.05 3.32 3.53 3.74

13
2.13. Depreciation Schedule:

COMPUTATION OF DEPRECIATION

Plant &
Description Land Machinery Other Assets TOTAL

Rate of Depreciation 15.00% 10.00%

Opening Balance Leased - - -
Addition - 24.78 3.00 27.78
- 24.78 3.00 27.78
- - -
TOTAL 24.78 3.00 27.78
Less : Depreciation - 3.72 0.30 4.02
WDV at end of Ist year - 21.06 2.70 23.76
Additions During The Year - - - -
- 21.06 2.70 23.76
Less : Depreciation - 3.16 0.27 3.43
WDV at end of IInd Year - 17.90 2.43 20.33
Additions During The Year - - - -
- 17.90 2.43 20.33
Less : Depreciation - 2.69 0.24 2.93
WDV at end of IIIrd year - 15.22 2.19 17.41
Additions During The Year - - - -
- 15.22 2.19 17.41
Less : Depreciation - 2.28 0.22 2.50
WDV at end of IV year - 12.94 1.97 14.90
Additions During The Year - - - -
- 12.94 1.97 14.90
Less : Depreciation - 1.94 0.20 2.14
WDV at end of Vth year - 11.00 1.77 12.77

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2.14. Repayment Schedule:

REPAYMENT SCHEDULE OF TERM LOAN 11.0%

Year Particulars Amount Addition Total Interest Repayment Cl Balance

I Opening Balance
Ist Quarter - 12.50 12.50 0.34 - 12.50
Iind Quarter 12.50 - 12.50 0.34 - 12.50
IIIrd Quarter 12.50 - 12.50 0.34 0.69 11.81
Ivth Quarter 11.81 - 11.81 0.32 0.69 11.11
1.36 1.39
II Opening Balance
Ist Quarter 11.11 - 11.11 0.31 0.69 10.42
Iind Quarter 10.42 - 10.42 0.29 0.69 9.72
IIIrd Quarter 9.72 - 9.72 0.27 0.69 9.03
Ivth Quarter 9.03 9.03 0.25 0.69 8.33
1.11 2.78
III Opening Balance
Ist Quarter 8.33 - 8.33 0.23 0.69 7.64
Iind Quarter 7.64 - 7.64 0.21 0.69 6.95
IIIrd Quarter 6.95 - 6.95 0.19 0.69 6.25
Ivth Quarter 6.25 6.25 0.17 0.69 5.56
0.80 2.78
IV Opening Balance
Ist Quarter 5.56 - 5.56 0.15 0.69 4.86
Iind Quarter 4.86 - 4.86 0.13 0.69 4.17
IIIrd Quarter 4.17 - 4.17 0.11 0.69 3.47
Ivth Quarter 3.47 3.47 0.10 0.69 2.78
0.50 2.78
V Opening Balance
Ist Quarter 2.78 - 2.78 0.08 0.69 2.08
Iind Quarter 2.08 - 2.08 0.06 0.69 1.39
IIIrd Quarter 1.39 - 1.39 0.04 0.69 0.69

Ivth Quarter 0.69 0.69 0.02 0.69 0.00

0.19 2.78

15
2.15. Financial Ratios:

FINANCIAL RATIOS
I II III IV V
TURNOVER 94.05 114.12 130.78 148.57 167.48
GROSS PROFIT 18.30 23.73 27.96 32.57 37.66
G.P. RATIO 19.45% 20.79% 21.38% 21.93% 22.49%

NET PROFIT 3.17 5.35 8.19 11.33 15.50

N.P. RATIO 3.4% 4.7% 6.3% 7.6% 9.3%

CURRENT ASSETS 15.19 17.53 19.83 22.21 24.71

CURRENT LIABILITIES 9.89 10.22 10.56 10.92 11.29
CURRENT RATIO 1.54 1.72 1.88 2.03 2.19

TERM LOAN 11.11 8.33 5.56 2.78 -

TOTAL NET WORTH 11.02 14.68 18.11 21.41 24.65
DEBT/EQUITY 1.01 0.57 0.31 0.13 -

TOTAL NET WORTH 11.02 14.68 18.11 21.41 24.65

TOTAL OUTSIDE LIABILITIES 21.01 18.55 16.12 13.70 11.29
TOL/TNW 1.91 1.26 0.89 0.64 0.46

PBDIT 9.36 10.70 12.73 15.14 18.64

INTEREST 2.17 1.92 1.61 1.31 1.00
INTEREST COVERAGE RATIO 4.32 5.57 7.89 11.57 18.60

WDV 26.84 25.70 24.39 22.90 21.23

TERM LOAN 11.11 8.33 5.56 2.78 -
FACR 2.42 3.08 4.39 8.25 -

16
2.16. Breakeven Point Analysis:

BREAK EVEN POINT ANALYSIS

Year I II III IV V

Net Sales & Other Income 94.05 114.12 130.78 148.57 167.48
Less : Op. WIP Goods ‐ 4.95 5.73 6.56 7.45
Add : Cl. WIP Goods 4.95 5.73 6.56 7.45 8.40

Total Sales 99.00 114.90 131.62 149.46 168.42

Variable & Semi Variable Exp.

Raw Material & Tax 54.00 60.94 68.25 75.94 84.00

Electricity Exp/Coal Consumption at 85% 2.85 3.09 3.33 3.57 3.80
Wages & Salary at 60% 14.29 16.25 19.24 22.53 25.73
Selling & adminstrative Expenses 80% 1.50 3.65 4.39 4.99 5.36
ii) Interest On Working Capital 0.81 0.81 0.81 0.81 0.81
Repair & Maintenance 5.64 6.85 7.85 8.91 10.05
Packing & other overheads 0.94 1.14 1.31 1.49 1.67
Total Variable & Semi Variable Exp 80.04 92.73 105.18 118.24 131.43

Contribution 18.96 22.17 26.44 31.22 36.99

Fixed & Semi Fixed Expenses

Electricity Exp/Coal Consumption at 15% 0.50 0.55 0.59 0.63 0.67

Wages & Salary at 40% 9.53 10.83 12.83 15.02 17.15
Interest on Term Loan 1.36 1.11 0.80 0.50 0.19
Depreciation 4.02 3.43 2.93 2.50 2.14
Selling & adminstrative Expenses 20% 0.38 0.91 1.10 1.25 1.34
Total Fixed Expenses 15.78 16.83 18.24 19.89 21.49

Capacity Utilization 60% 65% 70% 75% 80%

OPERATING PROFIT 3.17 5.35 8.19 11.33 15.50
BREAK EVEN POINT 50% 49% 48% 48% 46%
BREAK EVEN SALES 82.42 87.18 90.83 95.23 97.85

17
 3. Limitations of the Model DPR and Guidelines for Entrepreneurs

3.1. Limitations of the Model DPR

i. This model DPR has provided only the basic standard components and methodology to be
adopted by an entrepreneur while submitting a proposal under the Formalization of Micro Food
Processing Enterprises Scheme of MoFPI.

ii. This is a model DPR made to provide general methodological structure not for specific
entrepreneur/crops/location. Therefore, information on the entrepreneur, forms and structure
(proprietorship/partnership/cooperative/ FPC/joint stock company) of his business, details of
proposed DPR, project location, raw material base/contract sourcing, entrepreneurs own SWOT
analysis, detailed market research, rationale of the project for specific location, community
advantage/benefit from the project, employment generation and many more detailed aspects not
included.

iii. The present DPR is based on certain assumptions on cost, prices, interest, capacity utilization,
output recovery rate and so on. However, these assumptions in reality may vary across places,
markets and situations; thus the resultant calculations will also change accordingly.

iv. This particular DPR is made on three components of means of finance i.e. grant, owner’s
contribution and loan/debt as followed in many central sector schemes. However, if the DPR is
for credit linked subsidy then the calculation may slightly change without changes in the general
structure and methodology adopted in the DPR.

3.2. Guidelines for the Entrepreneurs

i.The success of any prospective food processing project depends on how closer the assumptions
made in the initial stage are with the reality of the targeted market/place/situation. Therefore, the
entrepreneurs must do its homework as realistic as possible on the assumed parameters.
ii.This model DPR must be made more comprehensive by the entrepreneur by including information
on the entrepreneur, forms and structure (proprietorship/partnership/cooperative/ FPC/joint stock
18
 company) of entrepreneur’s business, project location, raw material base/contract sourcing,
entrepreneurs own SWOT analysis, detailed market research, comprehensive dehydrated product
mix based on demand, rationale of the project for specific location, community advantage/benefit
from the project, employment generation, production/availability of the raw materials/crops in the
targeted area/clusters and many more relevant aspects for acceptance and approval of the competent
authority.

iii.The entrepreneur must be efficient in managing the strategic, financial, operational, material and
marketing aspects of a business. In spite of the assumed parameter being closely realistic, a
project may become unsustainable if the entrepreneur does not possess the required efficiency in
managing different aspects of the business and respond effectively in changing situations.

iv.The machineries should be purchased after thorough market research and satisfactory
demonstration.

v.The entrepreneur must ensure uninterrupted quality raw materials’ supply and maintain
optimum inventory levels for uninterrupted operations management.

vi.The entrepreneur must possess a strategic look to steer the business in upward trajectory.

vii.The entrepreneur must maintain optimum (not more or less) inventory, current assets. Selecting
optimum source of finance, not too high debt-equity ratio, proper capital budgeting and
judicious utilization of surplus profit for expansion is must.

viii.The entrepreneur must explore prospective markets through extensive research, find innovative
marketing strategy, and maintain quality, adjust product mix to demand.

ix.The entrepreneur must provide required documents on land, financial transaction, balance sheet,
further project analysis as required by the competent authority for approval.

x.The entrepreneur must be hopeful and remain positive in attitude.

………………………………
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