PROJECT REPORT

7/6/2019

YOLO &
ASSOCIATES

Name of the Partners:

Gautam Batra CRO0622696

Ekta Sharma CRO0643167
Kuldeep Rawat CRO0611357
Vikas Kumar NRO0436954
Liquor Store Business Overview
A liquor store is a retail shop that that is licensed to sell prepackaged alcoholic
beverages usually in bottles to customers who are likely to take home or
elsewhere to consume.

In the India, the Liquor store business is a regulated business which is

described under the State List under the Seventh Schedule of the Constitution
of India. It gives the power to regulate the sale and consumption of liquor and
other alcoholic beverages. It is important to note that State regulations vary
widely. Most states in the India have laws that clearly define which alcoholic
beverages must be sold in specialty liquor stores and which may be sold in
other venues.

The liquor, beer and wine industry is a profitable industry and it is open for any
aspiring entrepreneur to come in and establish his or her business; you can
chose to start on a small scale in a street corner like the average mom and pop
business or you can chose to start on a large scale with several outlets in key
cities.

Small Liquor Store Business Plan

– Executive Summary

City Spirits Liquor Store is a neighborhood liquor store that will be located in
centralized area between a residential neighborhood and a busy business
district in downtown Clock Tower, Dehradun. We aware that in most states in
the India, Dehradun is one of the states that allows individuals to operate a
liquor store and also sell other alcoholic drinks which is why we have decided
to launch our liquor store near Clock Tower, Dehradun. We have been able to
secure a 850 sq. ft. facility for our liquor store as required by the law in the
India.
We are in the liquor store business to make profits at the same to give our
customers value for their money and time; we want to give people who
patronize our liquor store the opportunity to choose not only from a wide
range of both locally and imported liquors but also from a wide range of beers
and other alcoholic drinks that are manufactured in the India.

We are aware that there are several large and small liquor stores all around
India, which is why we spent time and resources to conduct our feasibility
studies and market survey so as to enable us locate the business in an area
that will support the growth of the business and also for us to be able offer
much more than our competitors will be offering. We ensured that our facility
is easy to locate and our outlet is well secured with the various payment of
options.

City Spirits Liquor Store will ensure that all our customers are given first class
treatment whenever they visit our store. We have a CRM software that will
enable us manage a one on one relationship with our customers no matter
how large the numbers of our customer base may grow to. We will ensure that
we get our customers involved in the selection of brands that will be on our
racks and also when making some business decisions that will directly or
indirectly affect them.

City Spirits Liquor Store is owned by Mr. Raj Jain who has successfully
managed several bars and night clubs in Delhi and Mumbai prior to opening his
own liquor store.
Documentation
City spirits would constitute its busniess in the form LLP which will be governed
under LLP Act, 2008.

Limited Liability Partnership (LLP) is a newer form of business which is a mixture

of a company and a partnership firm. While it has benefits and characteristics of
a private limited company, it can be operated flexibly just like a normal
partnership.
Compliances are lesser in LLP as compared to a company, yet the partners have
limited liability since LLP acts as a legal entity separate from partners.

Documents required for registering LLP in India

Documents of both partners, as well as the partnership firm, have to be
submitted for registering the LLP.

Documents of Partners

1. ID Proof of Partners – All the partners are required to provide their PAN at
the time of registering LLP. PAN card acts as a primary ID proof.
2. Address Proof of Partners – Partner can submit anyone document out of
Voter’s ID, Passport, Driver’s license or Aadhar Card. Name and other details as
per address proof and PAN card should be exactly same. If spelling of own name
or father’s name or date of birth is different in address proof and PAN card, it
should be corrected before submitting to RoC.
3. Residence Proof of Partners – Latest bank statement, telephone bill, mobile
bill, electricity bill or gas bill should be submitted as a residence proof. Such bill
or statement shouldn’t be more than 2 months old and must contain the name
of partner as mentioned in PAN card.
4. Photograph – Partners should also provide their passport size photograph,
preferably on white background.
5. Passport (in case of Foreign Nationals/ NRIs) – For becoming a partner in
Indian LLP, foreign nationals and NRIs have to submit their passport
compulsorily. Passport has to be notarised or apostilled by the relevant
authorities in the country of such foreign nationals and NRI, else Indian Embassy
situated in that country can also sign the documents.
Foreign Nationals or NRIs have to submit a proof of address also which will be a
driving license, bank statement, residence card or any government issued
identity proof containing the address.
If the documents are in other than the English language, a notarised or apostilled
translation copy will be also be attached.

Documents of LLP

1. Proof of Registered Office Address

Proof of registered office has to be submitted during registration, or within 30
days of its incorporation.
2. Digital Signature Certificate
One of the designated partners needs to opt for a digital signature certificate
also since all documents and applications will be digitally signed by the
authorised signatory.

Additional Requirements
 An application that is addressed to the Excise & Taxation Officer.
 A treasury receipt of Rs. 2000 (for lifetime permits) and a treasury
receipt of Rs. 200 (for one year permit) has to be deposited under
the head 039-State Excise.
 Age Proof.
 Address Proof.
 Aadhaar Card.
 Permision From State Government.
Our products
City Spirits Liquor Store is going to operate a standard and licensed
neighborhood liquor store that will retail a wide range of liquors, beers and
wines just like any other licensed and standard liquor store in the India and in
any part of the world. We are in the liquor retailing business to make profits
and give our customers value for their money.
These are some of the products that we will retail in our liquor store;

 Liquors
 Beers ( Miller Lite, Budweiser, Kingfisher, Tuborg, Kalsberg, Heineken,
Corona, Bira 91, Foster’s, Hoegaarden, )
 Locally Crafted Beers (Pale Beers, Amber Beers, Dark Beers, Hebrew
Beers, Gluten Free, Organic Brews, Cider etc)
 Wines
 Distilled spirits
 Martinis
 Non – alcoholic beverages
Our Vision Statement
Our vision is to establish a one stop liquor store in the Heart of the city (Clock
Tower) – Dehradun and in other cities in the India.

Our Mission Statement

Our mission is to establish a liquor store business that will make available a
wide range of liquors, wines and beers from top brands at affordable prices to
the people – Dehradun and other cities in the India where we intend opening
our outlets and selling our franchise.

Our Business Structure

City Spirits Liquor Store do not intend to start a liquor retailing business like
the usual mom and pop business around the street corner; our intention of
starting a liquor retail business is to build a standard liquor store that will be a
one – stop shop for liquors, beers and wines which is why we will ensure that
we put the right structure in place that will support the kind of growth that we
have in mind while setting up the business.
We will ensure that we only hire people that are qualified, honest, customer
centric and are ready to work to help us build a prosperous business that will
benefit all the stake holders (the owners, workforce, and customers). As a
matter of fact, profit-sharing arrangement will be made available to all our
management staff and it will be based on their performance for a period of five
years or more especially when we start selling our franchise.
In view of that, we have decided to hire qualified and competent hands to
occupy the following positions:

 Chief Executive Officer (Owner)

 Store Manager
 Sales and Marketing Manager
 Information Technologist
 Accountants / Cashiers
 Cleaners
Roles and Responsibilities

Chief Executive Officer – CEO (Owner):

 Creating, communicating, and implementing the organization’s vision,

mission, and overall direction – i.e. leading the development and
implementation of the overall organization’s strategy.
 Responsible for fixing prices and signing business deals
 Responsible for providing direction for the business
 Responsible for signing checks and documents on behalf of the company
 Evaluates the success of the organization

Store Manager:

 Responsible for managing the daily activities in the store

 Ensure that the store facility is in tip top shape and conducive enough to
welcome customers
 Supervises the entire sales staff and workforce
 Any other duty as assigned by the CEO

Sales and Marketing Manager

 Manage external research and coordinate all the internal sources of

information to retain the organizations’ best customers and attract new
ones
 Develop, execute and evaluate new plans for expanding increase sales
 Document all customer contact and information
 Represent the company in strategic meetings
 Help increase sales and growth for the company

Information Technologist

 Manage the organization website

 Handles ecommerce aspect of the business
 Responsible for installing and maintenance of computer software and
hardware for the organization
 Manage the organization’s CCTV
  Handles any other technological and IT related duties.

Accountant / Cashier

 Responsible for preparing financial reports, budgets, and financial

statements for the organization
 Responsible for financial forecasting and risks analysis.
 Performs cash management, general ledger accounting, and financial
reporting
 Responsible for developing and managing financial systems and policies
 Responsible for administering payrolls
 Ensuring compliance with taxation legislation

Client Service Executive

 Ensures that all contacts with customer (e-mail, walk-In center, SMS or
phone) provides the client with a personalized customer service
experience of the highest level
 Through interaction with customers on the phone, uses every
opportunity to build client’s interest in the company’s products and
services
 Manages administrative duties assigned by the store manager in an
effective and timely manner

Cleaners:

 Responsible for cleaning the store facility at all times

 Ensure that toiletries and supplies don’t run out of stock
 Cleans both the interior and exterior of the store facility
 Any other duty as assigned by the restaurant manager.
Liquor Store Business Plan –
SWOT Analysis
Our intention of starting just one outlet of our liquor retail store in Dehradun is
to test run the business for a period of 2 to 5 years to know if we will invest
more money, expand the business and then open other outlets all over India
and also sell franchise throught the India.
We are quite aware that there are several liquor retail stores all over Long
Beach and even in the same location where we intend locating ours, which is
why we are following the due process of establishing a business. We know that
if a proper SWOT analysis is conducted for our business, we will be able to
position our business to maximize our strength, leverage on the opportunities
that will be available to us, mitigate our risks and be welled equipped to
confront our threats.
City Spirits Liquor Store employed the services of an expert HR and Business
Analyst with bias in retailing to help us conduct a thorough SWOT analysis and
to help us create a business model that will help us achieve our business goals
and objectives.
This is the summary of the SWOT analysis that was conducted for City Spirits
Liquor Store:

 Strength:
Our location, the business model we will be operating on (physical store and
online liquor store), varieties of payment options, wide range of liquors, wines
and beers (locally crafted beer inclusive) and our excellent customer service
culture will definitely count as a strong strength for City Spirits Liquor Store.
 Weakness:
A major weakness that may count against us is the fact that we are a new
liquor retail outlet and we don’t have the financial capacity to engage in the
kind of publicity that we intend giving the business.

 Opportunities:
The fact that we are going to be operating our liquor retail store in one of the
busiest area at the Clock Tower – Dehradun provides us with unlimited
opportunities to sell our liquors, wines and beers to a large number of people.
We have been able to conduct thorough feasibility studies and market survey
and we know what our potential clients will be looking for when they visit our
liquor retail store; we are well positioned to take on the opportunities that will
come our way.

 Threat:
We are quite aware that just like any other business, one of the major threats
that we are likely going to face is economic downturn. It is a fact that economic
downturn affects purchasing power. Another threat that may likely confront us
is the arrival of a new liquor retail outlet in same location where ours is located
or even the arrival of a night club and bar.

Liquor Store Business Plan –

MARKET ANALYSIS

Market Trends
 India is one of the fastest growing alcohol markets in the world. Rapid
increase in urban population, sizable middle class population with rising
 spending power, and a sound economy are certain significant reasons behind
increase in consumption of alcohol in India.

 Our latest report “Indian Alcohol Consumption - The Changing Behavior”

provides a comprehensive analysis of the market size of alcohol industry on
the basis of type of products, consumption in different states, retail channel
and imported and domestic. The Indian alcohol industry is segmented into
IMFL (Indian made foreign liquor), IMIL (Indian made Indian liquor), Wine,
Beer and imported alcohol. Imported alcohol has a meager share of around
0.8% in the Indian market. The heavy import duty and taxes levied raise the
price of imported alcohol to a large extent. Alcohol is exempted from the
taxation scheme of GST.

 The Indian alcohol market is growing at a CAGR of 8.8% and it is expected to

reach 16.8 Billion liters of consumption by the year 2022. The popularity of
wine and vodka is increasing at a remarkable CAGR of 21.8% and 22.8%
respectively. India is the largest consumer of whiskey in the world and it
constitutes about 60% of the IMFL market.

 Though India is one of the largest consumers of alcohol in the world owing
to its huge population, the per capita alcohol consumption of India is very
low as compared to the Western countries. The per capita consumption of
alcohol per week for the year 2016 was estimated at 147.3 ml and it is
expected to grow at a CAGR of 7.4% to 227.1 ml according to our estimates.

 The states of Andhra Pradesh, Telangana, Kerala, Karnataka, Sikkim Haryana

and Himachal Pradesh are amongst the largest consumers of alcohol in India.
The most popular channel of alcohol sale in India is liquor stores as alcohol
consumption is primarily an outdoor activity and supermarkets and malls are
present only in the tier I and tier II cities of India.

 The trends and pattern of alcohol consumption are changing in the country.
With the increasing acceptance of women consuming alcohol, growing
popularity of wine and high demand for expensive liquor, the market
scenario seems to be very optimistic in the near future. We conducted a
consumer research study for the alcohol market with around 1,000
respondents from the cities of Delhi, Chandigarh, Mumbai, Pune, Hyderabad,
Kolkata and Bangalore. The study reflected changing pattern of the
consumer’s mindset towards alcohol consumption in India. 3% of the
respondents who consumed alcohol favored wine for its health benefits.
 Though the popularity of whiskey is highest in the Indian market, its market
share is expected to increase more in the near future.

Our Target Market

When it comes to selling liquors, wines, beers and locally brewed beer, there is
indeed a wide range of available customers. In essence, our target market
can’t be restricted to just a group of people, but all those who drink liquors,
wines and beers and those who would want to try out liquor. One thing is
certain, our liquors, and other alcoholic drinks will not be sold to people who
are under aged.
In view of that, we have positioned our liquor retail store to service in area of
Clock Tower – Dehradun and every other location our liquor retail stores will
be located all over India. We have conducted our market research and we have
ideas of what our target market would be expecting from us.
We are in business to retail a liquors and a wide range of alcoholic drinks to the
following groups of people;
  Corporate Executives
 Business People
 Celebrities
 Military Men and Women
 Sports Men and Women (with the exemption of under – age)
 Students (with the exemption of under – age)
 Tourists
 Every adult in the neighborhood where our liquor store will be located.

Our Competitive Advantage

City Spirits Liquor Store is launching a standard and licensed liquor retail shop
that will indeed become the preferred choice of residence of area near Clock
Tower and in every other location where our outlets will be opened. Our liquor
retail store is located in a corner piece property on a busy road directly
opposite one of the largest residential estates and few meters away from a
busy business district. We have enough parking space that can accommodate
well over 10 cars per time.
One thing is certain; we will ensure that we have a wide range of liquors, wines
and beers available in our store at all times. It will be difficult for customers to
visit our store and not see the brand of alcoholic drinks that they are looking
for. One of our business goals is to make City Spirits Liquor Store a one stop
alcohol shop.
Our excellent customer service culture, online store, various payment options
and highly secured facility will also serve as a competitive advantage for us.
Liquor Store Business Plan – SALES AND MARKETING STRATEGY

Sources of Income

City Spirits Liquor Store is established with the aim of maximizing profits in the
liquor, wine and beer store retailing industry and we are going to go all the
way to ensure that we do all it takes to sell a wide range of products to a wide
range of customers.
City Spirits Liquor Store will generate income by retailing the following
alcoholic products:

 Liquors
 Beers ( Miller Lite, Budweiser, Kingfisher, Tuborg, Kalsberg, Heineken,
Corona, Bira 91, Foster’s, Hoegaarden, )
 Locally Crafted Beers (Pale Beers, Amber Beers, Dark Beers, Hebrew
Beers, Gluten Free, Organic Brews, Cider etc)
 Wines
 Distilled spirits
 Martinis

Sales Forecast

It is important to state that our sales forecast is based on the data gathered
during our feasibility studies, market survey and also some of the assumptions
readily available on the field.
One thing is common with liquor retailing business, the larger a liquor retail
store the larger the numbers of customers that will patronize them. Although
we may not be as large as the biggest liquor retail store in the India, but we will
ensure that within our capacity we make available a wide range of liquors,
wines, and beers from different brands both local and foreign in our liquor
store.
Below are the sales projections that we were able to come up with for the first
three years of operations;

Assumption: This projection is done based on what is obtainable in the

industry and with the assumption that there won’t be any major economic
meltdown and the arrival of a competitor in same location as ours within the
period stated above. Please note that the above projection might be lower and
at the same time it might be higher.

 First Year-: ₹75,00,000

 Second Year-: ₹2,50,00,000
 Third Year-: ₹7,50,00,000
 Sales

7%
1st Year
23% 2nd Year
3rd Year

70%

Liquor Store Business Plan –

Marketing Strategy and Sales
Strategy
Before choosing a location for City Spirits Liquor Store, we conduct a thorough
market survey and feasibility studies in order for us to be able to penetrate the
available market and become the preferred choice for residence near Clock
Tower – Dehradun and in every other cities where our outlets will be opened.
We have detailed information and data that we were able to utilize to
structure our business to attract the numbers of customers we want to attract
per time.
We hired experts who have good understanding of the liquor, wine and beer
retail industry to help us develop marketing strategies that will help us achieve
our business goal of winning a larger percentage of the available market of
Dehradun.
In other to continue to be in business and grow, we must continue to sell the
products that are available in our store which is why we will go all out to
empower or sales and marketing team to deliver.
In summary, City Spirits Liquor Store will adopt the following sales and
marketing approach to win customers over;

 Introduce our liquor store by sending introductory letters to residence,

business owners and organizations in and around Clock Tower –
Dehradun.
 Open our liquor store with a party
 Advertise our business in community based newspapers, local TV and
radio stations
 List our business on yellow pages ads (local directories)
 Leverage on the internet to promote our business
 Direct marketing
 Word of mouth marketing (referrals)

Liquor Store Business Plan –

Publicity and Advertising
Strategy
Despite the fact that our liquor retail store is well located, we will still go ahead
to intensify publicity for the business. We are going to explore all available
means to promote our liquor retail store.
City Spirits Liquor Store has a long term plan of opening outlets in various
locations all around the India which is why we will deliberately build our brand
to be well accepted in Dehradun before venturing out. As a matter of fact, our
publicity and advertising strategy is not solely for winning customers over but
to effectively communicate our brand.
Here are the platforms we intend leveraging on to promote and advertise City
Spirits Liquor Store:

 Place adverts on both print (community based newspapers and

magazines) and electronic media platforms
 Sponsor relevant community programs
  Leverage on the internet and social media platforms like; Instagram,
Facebook , twitter, etc to promote our brand
 Install our Bill Boards on strategic locations all around Clock Tower –
Dehradun
 Engage in roadshow from time to time
 Distribute our fliers and handbills in target areas
 Position our Flexi Banners at strategic positions in the location where
our liquor retail store is located.

Our Pricing Strategy

Pricing is one of the key factors that give leverage to liquor retail stores, it is
normal for consumers to go to places (liquor retail outlets) where they can get
liquors, wine and beers etc at cheaper price which is why big player in the
liquor, wine and beer retail industry like attract loads of consumers.
We know we don’t have the capacity to compete with other bigger liquor retail
store, but we will ensure that the prices of all the brands of liquors, wines and
beers etc that are available in our liquor store are competitive with what is
obtainable amongst liquor retail stores within our level and in our location.

 Payment Options
At City Spirits Liquor Store, our payment policy is all inclusive because we are
quite aware that different people prefer different payment options as it suits
them. Here are the payment options that will be available in every of our
outlets;

 Payment by cash
 Payment via Point of Sale (POS) Machine
 Payment via online bank transfer (online payment portal)
 Payment via Mobile money

In view of the above, we have chosen banking platforms that will help us
achieve our payment plans without any itches.
Liquor Store Business Plan –
Start – Up Expenditure (Budget)
When it comes to starting a liquor retailing store the major areas that you look
towards spending the bulk of your cash is in of course renting or leasing a
standard store facility. Aside from that, you are not expected to spend much
except for paying of your employees and the stocking of your store.
This is the key areas where we will spend our start – up capital;

 The Total Fee for Registering the Business in Dehradun – ₹10000.

 Legal expenses for obtaining licenses and permits as well as the
accounting services (software, P.O.S machines and other software) –
₹1,50,000.
 Marketing promotion expenses for the grand opening of City Spirits
Liquor Storein the amount of ₹15,000 and as well as flyer printing (2,000
flyers at ₹0.10 per copy) for the total amount of – ₹20,000.
 Cost for hiring Consultant – ₹7,500.
 Insurance (general liability, workers’ compensation and property
casualty) coverage at a total premium – ₹24,000.
 Cost for payment of rent for 12 month at ₹35000 per month in the total
amount of ₹4,20,000.
 Cost for Shop remodeling (construction of racks and shelves) – ₹70,000.
 Other start-up expenses including stationery ( ₹15,000) and phone and
utility deposits ( ₹2,500).
 Operational cost for the first 3 months (salaries of employees, payments
of bills et al) – ₹1,80,000
 The cost for Start-up inventory (stocking with a wide range of liquors,
wines, beers, tobaccos etc) – ₹5,00,000
 Storage hardware (bins, rack, shelves, food case) – ₹60,000
 The cost for counter area equipment (counter top, sink, ice machine,
etc.) – ₹45,500
 Cost for serving area equipment (plates, glasses, flatware) – ₹30,000
 Cost for store equipment (cash register, security, ventilation, signage) –
₹46,750
  Cost of purchase and installation of CCTVs – ₹50,000
 The cost for the purchase of furniture and gadgets (Computers, Printers,
Telephone, TVs, Sound System, tables and chairs etc) – ₹2,15,000.
 The cost of Launching a Website – ₹60.000
 The cost for our opening party – ₹70,000
 Miscellaneous – ₹10,000

We would need an estimate of ₹ 19,91,250 to successfully set up our liquor

retail store near clock tower – Dehradun. Please note that this amount
includes the salaries of all the staff for the first month of operation.

Generating Funding / Startup Capital for City

Spirits Liquor Store

City Spirits Liquor Store is a private business that is solely owned and financed
by Mr. Raj Jain and family. They do not intend to welcome any external
business partner, which is why we have decided to restrict the sourcing of the
start – up capital to 3 major sources.
These are the areas we intend generating our start – up capital;

 Generate part of the start – up capital from personal savings

 Source for soft loans from family members and friends
 Apply for loan from my Bank

They have been able to generate about ₹10,00,000 (Personal savings

₹7,50,000 and soft loan from family members ₹2,50,000) and are at the final
stages of obtaining a loan facility of ₹ 9,91,250 from our bank. All the papers
and document have been signed and submitted, the loan has been approved
and any moment from now our account will be credited with the amount.
Liquor Store Business Plan –
Sustainability and Expansion
Strategy
The future of a business lies in the numbers of loyal customers that they have,
the capacity and competence of the employees, their investment strategy and
the business structure. If any of these factor is missing from a business
(company), then it won’t be too long before the business close shop.
City Spirits Liquor Store will ensure that all the factors listed above are
reinforced on a regular basis and also we will engage in continuous capacity
building of our workforce. As a matter of fact, profit-sharing arrangement will
be made available to all our management staff and it will be based on their
performance for a period of three years or more.
We will make sure that the right foundation, structures and processes are put
in place to ensure that staff welfare is well taken of. Our company’s corporate
culture is designed to drive our business to greater heights and training and re
– training of our workforce is at the top burner. We have the plans of

Check List / Milestone

 Business Name Availability Check: Completed
 Business Registration: Completed
 Opening of Corporate Bank Accounts: Completed
 Securing Point of Sales (POS) Machines: Completed
 Opening Mobile Money Accounts: Completed
 Opening Online Payment Platforms: Completed
 Application and Obtaining Tax Payer’s ID: In Progress
 Application for business license and permit: Completed
 Purchase of Insurance for the Business: Completed
 Leasing of facility and remodeling the shop: In Progress
 Conducting Feasibility Studies: Completed
 Generating capital from family members: Completed
 Applications for Loan from the bank: In Progress
 Writing of Business Plan: Completed
 Drafting of Employee’s Handbook: Completed
 Drafting of Contract Documents and other relevant Legal Documents: In
Progress
 Design of The Company’s Logo: Completed
 Graphic Designs and Printing of Packaging Marketing / Promotional
Materials: In Progress
 Recruitment of employees: In Progress
 Purchase of the Needed furniture, racks, shelves, computers,electronic
appliances, office appliances and CCTV: In progress
 Creating Official Website for the Company: In Progress
 Creating Awareness for the business both online and around the
community: In Progress
 Health and Safety and Fire Safety Arrangement (License): Secured
 Opening party / launching party planning: In Progress
 Compilation of our list of products (liquors, beers, wines etc)that will be
available in our store: Completed
 Establishing business relationship with vendors – wholesale suppliers of
various brands of liquors, wines, beers, and tobacco et al: In Progress
 Expected Income Statement - 3 Years

Period Starting: Year 1: Year 2: Year 3:

Sales
Sales 75,00,000 250,00,000 750,00,000
Other
Total Sales 75,00,000 250,00,000 750,00,000

Less Cost of Goods Sold

Materials 22,50,000 75,00,000 225,00,000
Total Cost of Goods Sold 22,50,000 75,00,000 225,00,000

Gross Profit 52,50,000 175,00,000 525,00,000

Operating Expenses
Salaries and wages 10,00,000 12,00,000 14,00,000
Rent 4,20,000 4,20,000 4,20,000
Repairs and maintenance 1,50,000 1,75,000 1,20,000
Insurance 75,000 75,000 75,000
Travel 1,20,000 1,10,000 1,35,000
Telephone 6,000 6,000 6,000
Postage 2,000 3,500 4,200
Office supplies 85,000 64,000 72,000
Advertising 45,000 52,000 52,000
Bank charges 44,000 69,000 96,000
Depreciation 30,000 60,000 75,000
Miscellaneous 52,000 45,000 64,000
Other 10,000 10,000 10,000
Total Operating Expenses 20,39,000 22,89,500 25,29,200

Operating Income 32,11,000 152,10,500 499,70,800

Income (Loss) Before Taxes 32,11,000 152,10,500 499,70,800

Income Taxes 9,63,300 45,63,150 149,91,240

Net Income (Loss) 22,47,700 106,47,350 349,79,560

Depreciation on (Computers, Printers,
Telephone, TVs, Sound System, tables and
chairs etc)

Chart Title
80000

70000

60000

50000

40000

30000

20000

10000

0
Year 1 Year 2 Year 3

Series 1 Column1 Column2

 Breakeven Analysis

Cost Description Fixed Costs

Salaries and wages 10,00,000
Rent 4,20,000
Repairs and maintenance 1,50,000
Insurance 75,000
Travel 1,20,000
Telephone 6,000
Postage 2,000
Office supplies 85,000
Advertising 45,000
Bank charges 44,000
Depreciation 30,000
Miscellaneous 52,000
Other 10,000

Total Fixed Expenses 2039000

Breakeven Sales level = 2912857

Break-even sales (volume) = Fixed costs / C/S ratio (also known as

P/V ratio)

C/S ratio = contribution / sales

=70% (can be easily calculated from the projected income
statement)