Fruit Tang Yuan is the product resulted from the combination of fruits with the traditional Chinese food that is glutinous rice ball which commonly consumed during the Chinese festive season – Winter Solstice. Tang Yuan is originated from the Chinese words “reunion” which gives the meaning of being together especially among family members. What inspire our group to come up with this idea is that 22nd December of every years is the Winter Solstice where every Chinese make and eat Tang Yuan.
Our expo day is just one month before the Winter Solstice, and UMS students will be staying at the campus as there is no holiday, thus we thought of bringing this food product up to let them can experience the taste of “home” and feel the warmth of this special day even though we are far away from our hometown. Although students could not celebrate Winter Solstice with family, but they can celebrate here with friends and course mates, with this special food. In order to attract people with something common, a thought of combination is aspired.
What the market usually have is the traditional plain glutinous rice ball, or with black sesame, peanut and red bean inside. However, fruit-based Tang Yuan is a new idea. Secondly, fruits impress person with its nutritional value which is high in vitamins and fiber, and it is always combined in the dessert. Fruit is also something easy to manage and easily keep. A few types of fruit have been considered to combine with glutinous rice ball which include pineapple, mango, apple and orange. These fruits are more common and have greater acceptability.
The general idea on this product is that, the fruit juice is used to mix together with the dough to give it the taste and aroma of fruits and the fruit flesh is wrapped inside the dough. Hence a Tang Yuan with fruit aroma and the flesh chewable inside is expected. The Tang Yuan is served chill with two options of soup: soy milk or traditional ginger pandan soup. Since there is no provision of any electricity and no cooking is allowed during the expo day, the Tang Yuan product is planned as simple as possible. The Tang Yuan is ready prepared in a plastic container with cover.
Hence, convenience to bring away is also a factor to attract them to buy the product. Our target customers and market are students, as the location of the expo day will be at the library compound. Our target customers are especially for the locals. For the locals, Tang Yuan may be something new to them. Besides that, Chinese students will be able to taste Tang Yuan too though far away from home. Our team has proposed the name of our product as “Fruitti Mochi”. “Fruitti” gives a cuter way to pronoun “Fruit” while ”Mochi” is originated from a Japanese word which means glutinous rice ball.
An attractive product name may grab the attention of consumers as well. As our group had a few trials on the making of Fruitti Mochi, we found a problem is that it is not easy to apply fruits flavor on glutinous rice ball. When we mix juices, for example apple juice into the dough, wrapping apple flesh in it and cook, the flavor of apple is not strong enough to be tasted. Hence we made some modifications on the product and choose heavy flavor and aroma fruits such as mango to be applied on the glutinous rice ball.
Fruits which could give a nice appearance on the product, such as dragon fruit which give a sharp purple color to the Mochi are one of the choices of fruit we used. Thus, a little change in our product concept is that, the combination of fruits with glutinous rice ball can be done as long we could improve the glutinous rice ball with fruits in terms of flavor, appearance, and texture. Therefore, our group believes that although dragon fruits do not give a strong fruit flavor but it is acceptable since it gives a nice appearance on the product which can attract buyers.
Our group aim to sell the product at a high inventory turnover rate, this is to reduce the risk of profits loss. Thus, when the selling period is up the inventory might be cleared at a lower price. 2. 0 BUSINESS DESCRIPTION 2. 1 Company history The purpose of carrying on this business task is to create opportunity to sell creative products and create competition among all undergraduates who are taking UW 00302 Fundamental of Entrepreneurial Acculturation. In this business project, undergraduates are exposed to all sort of real life experiences. Communication skills are polished during this business project.
We learn how to deal with the market supplier and customers so that we can learn much of the products, especially the ingredient selection. Other than that, we are exposed to different management skill such as products promoting, packaging and decorating. Our group was formed by 11 people whose name starts with C alphabet from the same course. We held our first meeting after the lecturer assigned the task and divide the people into groups. In the first meeting, we discuss the type of product we plan to sell and also assign the people into different post according to their ability.
On the second meeting, we decided a few products to be presented to the lecturer and start doing research on it. However, the ideas were not practical and another meeting was held to discuss new ideas. We then improvise our idea to make it more creative and innovative and finally our idea was accepted. Then, we officially started planning the business. We also set up our group name as C’s Production which indicates the initial of our member name. We had met our supervisor Dr. Chye for advices. Capital of our business had set to RM275. Each of our group member contributed RM25 for the preliminary expenses.
The money is used to cover all the business expenses includes buying raw ingredients and to cover transportation expenses and other utility expenses. 2. 2 Type of business The type of business C’s Production Company is direct sell business. Direct sell business is selected as the customers are able to visualize our product and feel more confident to buy as they able to know the quality of our product. 2. 3 Vision To become one of the top 10 best-selling food store in UMS and ensure every customer have the chance to try our ‘Fruitti Mochi’. 2. 4 Mission
We will achieve our vision through providing quality food product, and service to our customers. 2. 5 Objective 1. To serve our uniqueness of ‘Fruitti Mochi’ which is different from the traditional Tang Yuan. 2. To provide quality and quantity dessert to the customers. 3. To meet the customer demand on our dessert product. 4. To gain maximum profit in our product. 2. 6 Location of business The location of a business is very important as a strategic location will get more sales. Strategic location is exposed to crowd and easily reach by crowd. The location of the expo is beside the UMS library.
The location is arranged by the organizing committee and is fixed. The stall arranged for our company is stall number 51 and it is quite far from the crowd. The location of the expo is not very strategic as not many people will pass by there. As the location is not strategic, besides selling on stall, we plan to sell our products from door-to-door at the hostel and also cafeteria of each kampung at our school campus which is Kampung A, B, C, D and E. 3. 0 ADMINISTRATION AND MANAGEMENT PLANNING 3. 1 Professional Profile of Management Board Name:Cheah Yuen Kuan Position: President
Capability: Leading, Planning, Manage and Decision Making Duty: – Issue order and leading the whole company – Determine the final product to be sold – Making overall final decision – Resolve problem(s) face by management executive – Ensure the progression of C Production Company goes on wheels – Allocating pertinent task(s) to each executive members – Analyze the risk taken during expo Name: Chan Jin Han Position: Vice President Capability: Administrate, Coordinate, and Communicate Duty: – Assists president in decision-making and management – Conveying decision make by president Supervises and insures the overall progression of company – Subrogate and conduct the company when the president discommodity Name: Chan Yuen Kei Position: Executive Secretary Capability: Efficient in Carrying Task and Organization Skill Duty: – Scribes minutes of all meeting – Collects reports from all departments – Prepares meeting report and final performance report Name: Chua Li Jing Position:Financial Executive Capability: Accounting Skill, Budget Control and Dependable Duty: – Financial and monetary control of the whole project – Collect all receipts from Purchase and Logistic Department Record all cash flow of the project – Prepare pro forma income statement, pro forma cash flow and pro forma balance sheet Name: Chan Meng Hong Position: Sales and Marketing Manager Capability: Organizing, Planning, Critical Analyzing and Marketing Duty: – Explore more effective marketing strategy and product promotion strategy to market the product – Understand and analyze the purchase trend and behavior of customers (survey) – Find ways to explore more target market and potential customers – Think creatively in marketing our product in competitive situation – Analysis pricing and product of competitors Predict the sales trend during expo – Control marketing budget – Prepare the marketing report Name: Chang Yong Sian Position: Sales and Marketing Manager Capability: Organizing, Planning, Critical Analyzing and Marketing Duty: – Explore more effective marketing strategy and product promotion strategy to market the product – Understand and analyze the purchase trend and behavior of customers (survey) – Find ways to explore more target market and potential customers – Think creatively in marketing our product in competitive situation – Analysis pricing and product of competitors – Predict the sales trend during expo Control marketing budget – Prepare the marketing report Name: Chan Pooi Lim Position: Publicity Executive Capability: Communicate, Publishing and Implementing Duty: – Posses high communicating skill – Able to persuade and stimulate the sales – Figure out the best ways to convey message to customers – Ensure the information is delivered completely and exactly to customers – Create attractive promotion opportunity (such as poster, banner and attire) Name: Chan Joo Wan Position: Publicity Executive Capability: Communicate, Publishing and Implementing Duty: – Posses high communicating skill Able to persuade and stimulate the sales – Figure out the best ways to convey message to customers – Ensure the information is delivered completely and exactly to customers – Create attractive promotion opportunity (such as poster, banner, and attire) Name: Chrisna Jaim Position: Purchase and Logistic Executive Capability: Efficient in Carrying task, Communicate Skill, Implementing Duty: – Conducts vendor analysis for best quality of sources (flour and fruits) – Contacts and bargains with suppliers – Manage supply chain and ensure sources (stocks) are adequate during expo Efficient allocation of resources Name: Chong Vui Keat Position: Product Development Executive Capability: Creative Thinking and Product Problem Solver Duty:- Assist Publicity Department in creatively promotion of our product – Solve problems face during product development, processing, packaging, and distributing. – Find alternative way to enhance quality of product in the means of flavor, taste, shape, color and possibly renewal formulation of ingredient Name: Chee Ghee Ping Position: Product Development Executive Capability: Creative Thinking and Product Problem Solver
Duty: – Assist Publicity Department in creatively promotion of our product – Solve problems face during product development, processing, packaging, and distributing. – Find alternative way to enhance quality of product in the means of flavor, taste, shape, color and possibly renewal formulation of ingredient 3. 2 Gantt Chart Activities| October (weeks)| November(weeks)| | 1| 2| 3| 4| 1| 2| 3| 4| Activity 1. 1:| Constitute of Organisation| #| | | | | | | | | Company’s Name, Vision & Mission Establish| #| | | | | | | | | Discussion Meeting| #| #| #| | #| #| | | | Proposal Plan| | | #| #| | | | | Management Planning & Strategy Planning| | | #| #| | | | | Activity 1. 2:| Implementing Project| | | #| #| #| #| #| | | Conduct Public Survey| | | #| | | | | | | Product Affirmation| | | #| | | | | | | Product Design & Publicity| | | #| #| #| #| | | | Product Development| | | #| #| #| #| | | Activity 1. 3:| Product Testing & Foretaste| | #| #| #| | | | | | Improvement (Technique & Ingredients)| | #| #| #| | | | | | Trial-Produce| | | #| #| #| #| | | | Final Quality Assurance Testing| | | | | | #| | | | Production & Packaging| | | | | | #| #| | . 0 PRODUCT/SERVICE 4. 1 Product and services description Fruitti Mochi is a fruit-based dessert. It is a combination of glutinous rice ball (Tang Yuan) and fruits. Tang Yuan is a Chinese food made from glutinous rice flour. Glutinous rice flour is mixed with a small amount of water to form balls and is then cooked and served in hot pandan ginger soup. Tang Yuan can be either small or large, and filled or unfilled. The picture illustrates the general idea of the product: There are four types of flavors for our product which are pineapple, mango, dragon fruits and pandan.
Pineapple flavor Mochi is glutinous rice ball with pineapple flesh wrapped inside, for mango flavor mango-taste nata de coco is wrapped inside and for dragon fruits and pandan it is plain glutinous rice ball. Nata de coco is used in mango flavor is because the natural mango flesh is too soft to be chewable and hence we replace it with something harder. Dragon fruits and pandan Mochi give a really nice color on the product and thus act as an attractive point on the Mochi. The picture above shows the dragon fruit Mochi that give a natural purple colour. During the expo day, all the cooked Mochi will be placed in plain water first.
We expect to serve on-site as customers order it, putting in the Mochi and pour in the soup that customers choose, either soy milk or the traditional ginger pandan soup that is served chill. A usable plastic container with cover is used to serve the Fruitti Mochi and also a plastic spoon is provided. This is convenient for buyers who comprise mainly from students to consume it and a cover functions to prevent the soup from spilling. Plastics bag also is also provided for easiness to carry around especially for students who need to hold books and files in their arm. 4. 2 Product description
The product which we are going to sell is fruit Tang Yuan. Tang Yuan is a Chinese food made from glutinous rice flour. Glutinous rice flour is mixed with a small amount of water to form balls and is then cooked and served in boiling water. Tang Yuan can be either small or large, and filled or unfilled. Our fruit Tang Yuan is sold under the name of ‘Frutti Mochi”. To make Fruitti Mochi different from the traditional one, we combine fruits with it and made it into Fruitti Mochi. There are many types of flavor that we are going to sell like pineapple, mango, dragon fruit, nata de coco and pandan.
Besides that, we also replace the soup with soy milk. If consumers do not like soy milk, we have the tradisional ginger pandan soup as another option. The product we sold is light and readily edible after buying. The buyers do not have to cook, steam or heat before consume. 4. 3 Uniqueness of product This product is unique in the sense that it is a combination of two common foods which can be easily obtained. The attractive color of dragon fruits and pandan is also a selling point of the product as visualization is an important factor in food as well. Therefore, Fruitti Mochi is really a new and fresh product for the customers.
In addition, it is delicious. Although the fruit flavor is rare, it is special and attractive. The rareness of this new flavor of fruit filling will cause people willing to try it. Yet, its appearance also stimulates customers’ appetite and their desire to taste it because Fruitti Mochi contains four different colors. Our products are suitable for all level of customers. 5. 0 MARKET ANALYSES 5. 1 PRODUCT ANALYSES Our group has proposed a brand new and creative product which is the “Frutti Mochi”. Our product has combined both the traditional and innovative element which is Tang Yuan with fruits filling.
We have provided a few choices of fruits as the Tang Yuan fillings. Besides, soya milk and ginger pandan soup is used as the soup base. Since our product is considered as a new product in the market which never seen before, we have decided to make a product analysis as an approach to analyze the acceptability of our product among our potential customers which are UMS students. Therefore, we have created an online questionnaire in Facebook and let UMS students filled up the questionnaire. The questions in our questionnaire included the gender, school, willingness to buy our product and the flavor of fruit Tang Yuan they preferred.
From the data which we have collected from 120 respondents, there are 44 male and 76 female respondent involved. This means that the respondents are made up of 36. 7% male and 63. 3% female. All the respondents involved are all UMS students from different schools. There are 59 students from SSMP, 23 from SST, 15 from SPE, 11 from SKTM, 5 from SPTA, 4 from SST, 1 from SPU, 1 from SPKS, 1 from SPPS and non from SPS. The highest amount of respondents involved is students from SSMP which consist of 49. 2% followed by 19. 2% of SST students, 12. 5% of SPE students, 9. 2% of SKTM students, 4. 2% of SPTA students, 3. 3% of SSS students, 0. % of SPU students, 0. 8% of SPKS students, 0. 8% SPPS students and 0% of SPS students. Among the 120 respondents that involved in our survey, 112 respondents showed an interest in our product and they are willing to buy our products. On the other hand, 8 of the respondents have no interest and would not buy our product. Therefore, we can make a summary that 93. 3% of respondents will buy our product and 6. 7% of respondents would not buy our product. From the figures, we can make a rough conclusion that our product has attracted the interest of the respondents and has a quite high acceptability among UMS students.
Besides, we have also included the question such as the flavor that the respondents preferred among those willing to buy our product. This is to help us to have a better understanding of the interest of the potential customers and have an improvement to our product designation and more. We have provided few fruit fillings for respondents to choose which included mango, apple, pineapple, banana and papaya. From the result of the survey, mango flavor has the highest vote which is 65 votes followed by 19 votes for apple, 16 votes for banana, 8 votes for pineapple and 4 votes for papaya.
This result means that mango occupies 58%, apple occupies 17%, banana occupies 14. 3%, pineapple occupies 7. 1% and papaya occupies 3. 6% of the votes among 112 respondents. From the cooperation of the respondents, we have a better understanding on the place of our product in market among UMS population. Besides, the information is also very helpful on the designation and improvement of our products. We are very thankful to the cooperative respondents who involved in our survey. 5. 2 Competitive Analysis During expo, our group is selling Frutti Mochi which is a type of dessert.
There are a few groups selling desserts too such as pudding on orange skin. Besides, we also need to compete with other groups which are selling food. Therefore, we need to strive to attract customers to buy our products. Below is the list of prices of competitors’ products as well as our: Products| Prices| Fruitti Mochi| RM2. 00| Competitor A| RM3. 00| Competitor B| RM3. 00| Competitor C| RM1. 50| Competitor D| RM2. 50| Quantity is another area of concern. The list below shows the quantity per serving of the competitors’ products as well as ours: Products| Quantity per serving| Fruitti Mochi| 6| Competitor A| 4|
Competitor B| 1| Competitor C| 1| Competitor D| 1| The price of our product is reasonable and affordable because it correlates with the quantity that we serve. We try to make it cheaper so that we can attract more customers to buy our products. Besides that, we also have a promotion price for our products. A promotion price of RM3. 50 for two boxes of Fruitti Mochi is available near the end of the expo. This is our business strategy to compete with other groups. 5. 3 Market Share Market share is the percentage of a market accounted for by a specific entity. Unit market share is used in this business proposal.
By using the formula: Unit market share (%) = 100 * [Unit sales / Total Market Unit Sales (A+B+C+D)] Unit market share = 100 * 200 / (200+100+150+200+100) = 26. 67% 6. 0 MARKETING PLAN 6. 1 Target Market The scope of our business is within University of Malaysia Sabah. The location of our business is the APK Expo that held at car park of library on 19th and 20th November 2012. It would be a grand bazaar as many stalls will be set up. Thus, our business is to target the undergraduates and postgraduates who would be visiting the Expo. Due to the location is near to library, it will attract a lot of undergraduates and postgraduates. . 2 Marketing strategies There are many areas that we need to consider in marketing planning involving environment competition, the regions politics, law, economic, technology, social and cultures. A marketing plan normally will contain description of the product, marketing budget including the advertising and promotional plan, description of the business location, marketing strategy and market segmentation. Marketing enviroment is important as well because understanding marketing plan gives aid to produce a suitable product, price, promotion strategy and the pattern of distribution.
This is useful in order to fulfill consumers’ demand and satisfaction. 6. 3 Price For our product, “Frutti Mochi”, we are going to sell it in a box of 6 with different flavors in a medium round plastic box at a price of RM2. 00 each. It is a very reasonable and affordable price for every undergraduates as well as postgraduates student. Besides, we have a plan to promote our products by buying two boxes of “Frutti Mochi” at once will get a cheaper price which is RM3. 50. This way is considerable for those buyers that which to buy together with their friends and thus they can save RM0. 0. We believed that this way of selling can probably increase the demand for our products “Frutti Mochi”. These prices are based on the current surveyed market price of undergraduates and postgraduates. Therefore, we are confident that our product will sell well. 6. 4 Promotion In order to attract customers, we will promote our product at Facebook which is the largest social network in the world nowadays. We will design an attractive poster at Facebook which can attract more attention of friends or people about our product.
Facebook as a promotion medium can spread easily and faster than any other way of promotion as most of the targeted customers have access to the Internet. Besides, we also promote our product by distribute flyers to friends and paste on the wall of cafe ,bus stop and hostel A, B,C, D and E. Hence, it can let more and more people know and familiar with our product. Students may pay attention for our flyers when they are waiting bus or passed by the staircase. Then, we also may ask friends in different schools like SPE, SST, SKTM and others to promote our product by using verbal promotion.
It is one of the most effective promotion tools because it is fast and “free of charge”. 6. 5 Pattern of distribution There will be 4 flyers on the front and back page of a piece of of A4 paper with designative and attractive photos of “Fruitti Mochi”. After the designation, we will photocopy it with total of 80 papers which equals to 320 flyers. Members who stay in Kampung E will distribute the flyers to various hotspots in the hostel area such as cafe, bus stop, notice board, and even room-to-room. Besides that, we will distribute flyers to our friends throughout UMS. . 6 Marketing Budget The flyers that we plan to print are estimated to be 80 sheets at a price of RM0. 10 for each double printed white sheet of paper. Thus, we will be using a cost of RM 8. 00 for our marketing budget which involved flyers with designable and attractive photos of our “Fruitti Mochi” and briefly discussion about the ingredients used. The flyers will then be distributed and promoted to students from Kampung E and respective schools. 7. 0 OPERATIONAL ANALYSES Two days before expo, the Frutti Mochi are made and stored in the refrigerator.
In the early morning of expo, the Fruitti Mochi and the ginger pandan soup will be cooked. The ginger pandan soup is cooked and kept chilled in the fridge. They will then be brought to the expo by car and kept fresh. The Fruitti Mochi is packed into containers each with 2 pineapple, 2 mango, 1 dragon fruit and 1 pandan flavor. The soup and and Fruitti Mochi are covered for hygiene purposes. The soy milk and pandan ginger soup are poured inside the container when the customers buy the dessert. We also provide plastic spoon and plastic bag for customers. Our logistics will be handled by two members (2 cars).
There is a refrigerator available (from SSMP) to keep the dessert fresh. Members will be carrying on their duty according to the schedule planned. Members who are taking the last shift are responsible to make sure the cleanliness of the booth. Any cooking and serving utensils should be cleaned before the Expo starts and at the end of the day. During the Expo, members are urged to bring their friends to the booth since there will be a promotion period when the Expo is going to end. Member who is in charge of the financial part has to calculate the profit made during the Expo. 8. FINANCIAL PLAN 8. 1 Financial resource There are two types of financial resource that are equity capital and debt capital. Our organization chose the equity capital. Equity capital is referring to the private investment that has been invested by the owner. Advantage| Disadvantage| * Fully controlling the company * No need to pay back any loan * No interest rate. | * Capital resources is limited * Risking the investment| Each of members in management team will be the shareholder and every one of us will invest RM25. 00. As we have a total member of 11, so we have RM275. 0 as our capital to start the business. 8. 2 Modal Group member (s)| Modal| Chan Jin Han| RM 25. 00| Chan Joo Wan| RM 25. 00| Chan Meng Hong| RM 25. 00| Chan Pooi Lim| RM 25. 00| Chan Yuen Kei| RM 25. 00| Chang Yong Sian | RM 25. 00| Cheah Yuen Kuan| RM 25. 00| Chee Ghee Ping| RM 25. 00| Chong Vui Ket| RM 25. 00| Chrisna Jaim| RM 25. 00| Chua Li Jing| RM 25. 00| Total| RM 275. 00| 8. 3 Implementation Cost Schedule Items | Unit| Unit Price (RM)| Total Price (RM)| OPERATION COST| | | | Rental Fee (RM20 is refundable)| | | 40| Transportation Expense| | | 10| Electricity and Water Expense| | | 3|
Promotion Fee| | | 10| | | | 63| INGREDIENTS| | | | Sugar (1 kg)| 2| 2. 40| 4. 80| Glutinous rice flour (500g)| 7| 2. 80| 19. 60| Pineapple (tin)| 2| 3. 50| 7. 00| Mango| 8| 1. 25| 10. 00| Dragon Fruit| 1| 2. 50| 2. 50| Nata de Coco (1. 5kg)| 1| 5. 50| 5. 50| Soy Bean Milk (1 litre)| 5| 2. 40| 12. 00| Pandan Leaf| 1| 1. 00| 1. 00| Ginger| 1| 1. 00| 1. 00| | | | 63. 40| MATERIALS| | | | Plastic Bag | 200| 0. 029| 5. 80| Plastic Cup with Cover| 200| 0. 23| 46. 00| Plastic Spoon| 200| 0. 02| 4. 00| | | | 55. 80| | | | | TOTAL| | | 182. 20| | | | | Implementation Cost (subtotal)| | | 182. 0| Contingency Cost| | | 92. 80| Grand Total| | | 275. 00| 8. 4 Cost Estimation for Fruitti Mochi Item| Unit Cost per serving| Sugar | 0. 0240| Glutinous rice flour | 0. 0980| Pineapple | 0. 0350| Mango| 0. 0500| Dragon Fruit| 0. 0125| Nata de Coco | 0. 0275| Soy Bean Milk | 0. 0600| Pandan Leaf| 0. 0050| Ginger| 0. 0050| Plastic Bag | 0. 0290| Plastic Cup with Cover| 0. 2300| Plastic Spoon| 0. 0200| Rental Fee | 0. 2000| Transportation Expense| 0. 0500| Electricity and Water Expense| 0. 0150| Promotion Fee| 0. 0500| Total| 0. 9110| 8. 5 Forecasted Business Financial Forecasted Sales
Product| Estimated Unit| Sale per Unit (RM)| Total Sale (RM)| Frutti Mochi| 200| 2. 00| 400. 00| Forecasted Profit | Amount (RM)| Total Sales| 400. 00| | | Calculations for Total Cost| | Product| Estimated Unit| Cost (RM)| | Frutti Mochi| 200| 0. 9110| | Total Cost| 182. 20| Net Profit| 217. 80| One box of Frutti Mochi costs RM 2. 00. In order to attract customers and boost up the selling amount of our products, as mentioned in the Marketing Planning part, consumers who buy two boxes of Frutti Mochi at once can get a cheaper price of Frutti Mochi at RM3. 50. This will help consumers to save RM 0. 5 per box if they buy 2 boxes. However, in the same time this causes us to gain less profit from the selling. With the original selling price of RM2. 00 per box, the selling of Frutti Mochi at promotion price which is RM3. 50 for 2 boxes causing us to gain less profit of RM0. 25 per box. To overcome this, we limit the selling of Frutti Mochi at promotion price to 100 boxes only. Profit gained when 50 boxes out of 200 boxes are sold at promotion price: | Amount (RM)| Calculations for Total Sales| | Product| Estimated Unit| Price (RM)| | Frutti Mochi| 50| 1. 75| 87. 50| Frutti Mochi| 150| 2. 0| 300. 00| Total Sales| 387. 50| | | Calculations for Total Cost| | Product| Estimated Unit| Cost (RM)| | Frutti Mochi| 200| 0. 9110| | Total Cost| 182. 20| Net Profit| 205. 30| Profit gained when 100 boxes out of 200 boxes are sold at promotion price: | Amount (RM)| Calculations for Total Sales| | Product| Estimated Unit| Price (RM)| | Frutti Mochi| 100| 1. 75| 175. 00| Frutti Mochi| 100| 2. 00| 200. 00| Total Sales| 375. 00| | | Calculations for Total Cost| | Product| Estimated Unit| Cost (RM)| | Frutti Mochi| 200| 0. 9110| | Total Cost| 182. 20| Net Profit| 192. 80| 8. Pro Forma Income Statement 8. 7 Pro Forma Cash Flow Statement 8. 8 Pro Forma Balance Sheet 8. 9 Break-even analysis Break-even analysis is calculated to determine the minimum units of products to sell to avoid facing any lose. The basic idea of break-even point is to calculate the point at which revenues begin to exceed costs. Break-even point (in quantity) = ____ Fixed Costs _____ Price – Variable Costs = 612-0. 9135 = 56. 14 The first step is to separate a company’s costs in to variable costs and fixed costs. Fixed costs are costs that do not change with the quantity of output.
Examples of fixed cost include rental fee, insurance premiums or loan payments. Variable costs are costs that change with the quantity of output. Examples of common variable costs raw materials used, costs of goods sold, sales commissions, delivery charges or shipping charges. Based on the total variable expenses per serving of Fruitti Mochi, we know that our company must set the price higher than RM0. 9135 to cover the costs. The selling price of our finished product is RM2. 00 per serving. Therefore, we receive RM1. 0865 per serving to contribute to the fixed costs and ultimately the company overall profits.
From the equation above, our company must sell 57 servings of Fruitti Mochi in order to break even. The break-even point helps business owners to determine when they will begin to turn a profit and assists them with the pricing of their products. Typical variable and fixed costs differ widely among industries. Therefore, comparison of break-even points is generally most meaningful among companies within the same industry and the definition of a high or low break-even point should be made within this context. 9. 0 ASSESSMENT OF RISKS 9. 1 Risk identification and contingency table Every business has its own risks, so does our business.
The risks in selling Fruitti Mochi are quite high compared to other non-food products. Below are the risks we encountered followed by the contingency plan. No. | Risk Identification| Cause/Effect| Contingency plan| 1. | Weather | Sunny day| Students feel uncomfortable and will not wish to stay too long under the hot sun. | Not much we can do when it is a very sunny day. | | | Rainy day| Students may get wet. | Umbrella can be used while trying to promote to customer. | 2. | Location | Far from the crowd. | Students may not notice our stall and by the time they reach our stall, they might lost interest. Members will try to approach the students by promoting the food products at different places. | 3. | Product| Acceptability| Students may not know our product. They may not give it a try and think that the product is non-halal. | Members will try to explain the product and expose them to experience eating Chinese traditionally made glutinous rice balls. | 4. | Storage| Chilling of the soy milk and pandan ginger soup| It may not serve chilled when selling to customers. | An ice box is used to keep the soy milk and pandan ginger soup chill. The ice box is only opened when necessary. |