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CATERING AND DECORATING SERVICE

SERVICE CAPACITY (Value) : Rs. 24,00,000/-
MONTH AND YEAR : July, 2014
OF PREPARATION
PREPARED BY : Sh. V. M. Jha
Deputy Director (Metallurgy)


1. INTRODUCTION
For the proposed project food preparation is assumed to be outsourced to the
food producers and the business will cater the needs of serving and decoration. This
service is typically provided at the banquets, conventions and weddings.
A catering company is expected to know not only food preparation, but how
to make it attractive. For example a wedding requires working with the entire theme
or colour scheme of the wedding including stage setup, background props, entrance,
reception, seating arrangements, etc.
Much catering is sold on a per-person basis.

2. MARKET POTENTIAL
Catering and decorating industry is a growing industry. The business has
picked up and wedding hall bookings are on the rise.
This service industry has three main market segments: Professional Catering,
2
nd
segment contains hotel and restaurants that provides catering as ancillary
services and 3
rd
Catering outlets.
There are continuous demands for catering and decoration services at various
community halls, convention centers, public places, birthday parties, political rallies
and regular community meetings provide a continuous stream of revenue for the
catering industry.
Nowadays caterers have started to provide a single window operation for
their customers and shifting towards event management rather than just providing
catering and decoration services.



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3. BASIS AND PRESUMPTIONS
i. Project will work on single shift of 8 hrs. working per day and 300 working
days in a year with 80% efficiency.
ii. Time period for achieving full 3 months
capacity utilisation
iii. Labour wages Based on local Market conditions
iv. Interest for fixed & working capital 14% on an average
v. Margin money 25% on an average of project cost
vi. Operative period of the project 10 years
vii. Land cost and construction cost Rented Shed
viii. Cost of Machinery & equipments Prevailing cost of market

4. IMPLEMENTATION SCHEDULE
i. Scheme preparation 1 months
ii. Entrepreneurs Memorandum 1 month
iii. Acquisition of rented shed 2 months
iv. Clearance from various Authorities 1 month
v. Arrangement of loan for working capital/fixed capital 3 months
vi. Placement of order & delivery of machines 2 months
vii. Installation of machinery, electrification, staff recruitment 1 months
viii. Power connection 2 months
ix. Commissioning, trial run & commercial operation 1 month
Some activities may be initiated simultaneously and the project may come to
the stage of commercial production within 5 months.

5. TECHNICAL ASPECTS
5.1. Process Outline
The process constitutes of Preparing the food, Setting up the dining area &
waiting tables and Setting up the stage & decor depending on the clients
requirement.

5.2. Quality Control and Standards
Quality of food and service must be as per the requirement of customer. The
target should be to make the whole event a success for the customer.

5.3. Service Capacity
100 Events per Annum.

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5.4. Motive Power 10 KW

5.5. Pollution Control
The wastes should be disposed off as per the guideline/norm of the local
authorities.

5.6. Energy Conservation
Burners of the oven should be cleaned regularly. LED lamps to be fitted to
save electricity.

6. FINANCIAL ASPECT
6.1. Fixed Capital
Land & Building: Rented at Rs. 20,000/- per month.

6.1.1. Machinery and Equipments
(a) Machinery and Equipments
Sl. No. Description Ind./Imp. Qty. Price (Rs.)
1. Decorative Equipments Ind. L.S. 5,00,000
2. Cutlery/Equipments Ind. L.S. 1,00,000
(b) Cost of Power Connection 3,000
(c) Electrification and Installation charges 20,000
(d) Cost of tools & other fixtures 50,000
(e) Cost of Office equipments, working table, etc. 17,000
(f) Preoperative Expenses 10,000
Total Fixed Capital Rs. 7,00,000/-

6.2. Working Capital (per month)
6.2.1. Personnel
S. No. Designation No Rate Total (Rs.)
1. Manager 1 15,000 15,000
2. Caterers 4 7,500 30,000
3. Helper 3 5,000 15,000
Perquisites @ 15% of salary 9,000
Total 69,000

6.2.2. Raw Materials
Various Raw Materials L.S. Rs. 10,000


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6.2.3. Utilities
1. Power Rs. 5,000
2. Water Rs. 5,000
3. Gas Rs. 10,000
Total Rs. 20,000

6.2.4. Other Contingent Expenses
S. No. Description Value (Rs.)
1. Rent 20,000
2. Stationery & consumables stores 5,000
3. Transportation 25,000
4. Telephone 2,000
5. Advertisement/publicity 500
6. Insurance, Taxes & Miscellaneous Expenses 1,500
Total 49,000

6.2.5. Total Recurring Expenditure (per month) Rs. 1,48,000/-

6.3. Total Capital Investment
Fixed Capital Rs. 7,00,000
Working Capital (2 months) Rs. 2,96,000
Total Rs. 9,96,000/-

7. FINANCIAL ANALYSIS
7.1. Cost of Operation (per annum)
S.No. Description Amount (Rs.)
1. Total Recurring Cost per year 17,76,000
2. Depreciation on Machinery & Equipment @ 10% 60,000
3. Depreciation on Office Equipment & Furniture @ 20% 3,400
4. Interest on Total Investment @ 14% 1,39,440
Total 19,78,840

7.2. Turnover (per annum)
100 Events X 100 persons on average/event X Rs. 200/person Rs. 20,00,000
Decoration of Dias/Stages, etc. Rs. 4,00,000
Total Rs. 24,00,000

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7.3. Net Profit (per annum)
= Turnover Cost of Operation
= Rs. 4,21,160/-

7.4. Net Profit Ratio
=
Net profit per year
X 100
Turnover per year

= 17.5 %

7.5. Rate of Return
=
Net profit per year
X 100
Total Capital Investment

= 42.3 %

7.6. Break-even Point
Fixed Cost (Per Annum) (Rs.)
Rent 2,40,000
Total Depreciation 63,400
Total Interest 1,39,440
Insurances, Taxes, etc. 18,000
40% of salary and wages 3,31,200
40% of other Contingent expenses
(Excluding rent & Insurance)
1,32,000
Total 9,24,040

B.E.P
=
Fixed Cost
X 100
Fixed Cost + Net Profit

= 68.7 %


Address of Machinery & Equipment Suppliers
Branded equipments/utensils are available in local markets.