The purpose of this document is
to facilitate potential investors in Bakery and Confectionery Business by
providing them a general understanding of the business with the intention of
supporting potential investors in crucial investment decisions. The need to
come up with pre-feasibility reports for undocumented or minimally documented
sectors attains greater imminence as the research that precedes such reports
reveal certain thumb rules; best practices developed by existing enterprises by
trial and error, and certain industrial norms that become a guiding source
regarding various aspects of business set-up and it’s successful management.
Apart from carefully studying the whole document one must consider critical
aspects provided later on, which form basis of any Investment Decision.
EXECUTIVE SUMMARY
Bakery and Confectionery business
is growing in both urban and semi-urban areas. This pre-feasibility study
encompasses the bakery business located in commercial neighborhood surrounding
and middle income residential localities. Major products include cakes, snacks,
sweets, nimko, biscuits, bread and general confectionery items, which will be
sold to target customers of the vicinity. The sales outlet will be supported by
an in house production facility. Selections of adequate product mix and
business location, supported by marketing efforts are the critical success
factors.
BRIEF DESCRIPTION OF PROJECT
& PRODUCT
The proposed Bakery and
Confectionery shop is a small scale project with a production area and sales
out-let. It will be equipped with basic machinery and fixtures. The production
area will require covered area of 2,700 sqft and the outlet will be established
on 900 sq.ft. The sales outlet will remain open for business for 16 hours per
day around the year. Product mix will
include cakes, snacks, sweets, nimko, biscuits, bread and general confectionery
items. This merchandise will be prepared and acquired according to the demand
of local customers and in quantities directly proportional to expected sales. Maximum
sales are expected during Eid seasons and in winters. First year revenues of
the project are estimated to be Rs 11.24 million. It is expected that
production growth rate will be 5% per annum along with 10% per annum increase
in sales price.
CRITICAL FACTORS
• Background knowledge and
experience of the entrepreneur in the bakery business.
• Induction of trained human
resource for production of requisite items.
• Maintenance of quality and
hygiene standards.
• Pricing strategy &
understanding requirements of the target customers.
• Decor presentation and layout
of the shop and products.
• Location considerations for
easy access of the customers.
INSTALLED & OPERATIONAL
CAPACITIES
As mentioned, the sales of bakery
items are 70 % of total sales revenue. The installed capacity of bakery depends
on the variety of the products being produced. Installed capacity of major
production items is cakes 23,785 pounds, 40,470 pieces of snacks, 6,035 kgs of
sweets and nimko, and 5,325 kgs of mixed biscuits. Starting capacity
utilization is 70% of the installed capacity growing at the rate of 5% per
annum.
POTENTIAL TARGET MARKET
Areas having presence of middle
income groups in the smaller cities will be an ideal location for opening sales
outlet of the business. Ideally, production facility of the workshop should be
located alongside the sales outlet; however, if the rental costs are a
constraint, production facility can be established at a distant economical
location. In such a case, higher transportation costs may need to be factored
in.
Smaller cities with growing
middle income group such as Sargodha, shekhupura, Gujrat, Sukkur, Hyderabad,
Nowshehra, Charsadda, Quetta, Khuzdar and Gilgit are some of the prospective
cities for setting up this business.
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