ISHAN INSTITUTE OF MANAGEMENT AND TECHNOLOGY Business Proposal Report on NISHANJALI PRIVATE LIMITED

A business proposal report submitted to IIMT, Greater Noida as a partial fulfillment of full time Post Graduate Diploma in Management

(HUMAN RESOURCE MANAGEMENT )

SUBMITTED TO: Dr. D.K. Garg, Chairman, IIMT, Greater Noida

SUBMITTED BY: ANJALI JAYADEV (HRR 3035) and NISHA JAIN ( HRR 3023)

ISHAN INSTITUTE OF MANAGEMENT AND TECHNOLOGY

1A, Knowledge Park-I, Greater Noida, Distt: G.B. NAGAR (U.P.) Website: www.ishanfamily.com, Email: ishan_corporate@yahoo.co.in
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ACKNOWLEDGEMENT
Inspiration leads to Dedication, Dedication leads to Accomplishment, Accomplishment leads to Acknowledgement. The satisfaction that accomplishes the successful completion of any work is when we say thank you to the people who made it possible, whose constant encouragement and guidance has been a source of inspiration throughout the preparation of Business Proposal. We would like to dedicate this work to our revered institute IIMT, Greater Noida where we are getting the exposure towards shaping ourselves to become future business manager. I express my sincere gratitude to honorable Dr. D.K. GARG (Chairman) of IIMT, Greater Noida for their support and guidance on the ground of which I have acquired a new field of knowledge. We take the opportunity to express our heartiest gratitude to our respective faculty lecturers, parents and friends who have been constantly helping me in successful completion of the project. First of all we would thank Dr. D.K Garg, Chairman, Ishan Institute of Management and Technology, for giving us this opportunity to acquaint us with the ideas of setting up a business. In this business proposal, we have chosen Nishanjali Tea house Private Limited. The study has indeed helped me to explore more knowledgeable avenues related to my Business and we are sure it will help in my future.

DECLARATION

The Business Proposal Report on Nishanjali Private Limited is the original work done by Anjali Jayadev (HRR-3035) and Nisha Jain (HRR-3023). This is the property of the Institute and use of this report without prior permission of the Institute will be considered illegal and actionable.

Signature
(Anjali Jayadev )

Signature
(Nisha Jain)

Enr:- HRR-3035

Enr:- HRR-3023

PURPOSE OF STUDY

The world around us is so competitive where we have to implement all our theoretical as well as practical skills and knowledge. And as a management student, our aim is to start a business or manage a business in which we can astutely and successfully take all the business decisions managing the nitty-gritty of it. And for the survival in this cut-throat competition, the perfection in each and every aspect is very much required. You cannot move ahead in any business without the basic insight of it. The purpose of this business proposal is to learn how to implement and use theoretical knowledge by practically doing it in the real business world. Main purpose of this business proposal can be listed down as below. Learning to implement all the managerial skills and qualities.  Correlating the theoretical knowledge with practical one.  Learning to manage the whole task and delegating the authority in a fully fledged manner.  Improving thinking and analytical power.

TABLE OF CONTENTS

S.No. 1. 2. 3. 4.
5. 6. 7. 8.

Particulars EXECUTIVE SUMMARY LOGO AND ITS DESCRIPTION MOTO, MISSION AND OBJECTIVE COMPANY INTRODUCTION MARKET ANALYSIS SWOT ANALYSIS MARKETING AND SALES STRATEGY MANAGEMENT SUMMARY PERSONNEL PLAN FINANCIAL PLAN AND ANALYSIS CONCLUSION

Page No. 6 7 8 9-18 19-22 23-24 25-27 28 28 28-31 32

. . .

Executive Summary
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Nishanjali is a new tearoom in Darjeeling, the Queen of Hill Stations. Nishanjali Teahouse is a newly established shop managed by its owners Nisha Jain and Anjali Jayadev. Nisha Jain has 3 years of training as a herbalist and she is currently training to be a nutritionist and has also worked as a teatender in Assam; her knowledge of the health benefits of tea will help our marketing and sales efforts. Anjali Jayadev has five years of experience managing a successful boutique coffeehouse in Munnar, Kerala. Nishanjali will offer a full range of teas (hot and iced), as well as pastries, premium chocolates, tea accessories, and loose teas for taking home or giving as gifts. Nisha Jain is a master tea tender, and Anjali Jayadev has been learning proper brewing techniques from her for the last four months. We will train all of our tea tenders in the proper storage, brewing, and serving of each kind of tea. In 2003, world production was 3.21 million tonnes annually and by 2008, world tea production reached over 4.73 million tonnes. While at the time of Independence only 79 Million Kilograms or about 31% of total production of 255 Million Kilograms of tea was retained for internal consumption, in 2008 as much as 802 Million Kilograms or about 82% of total production of 981 Million Kilograms of tea went for domestic consumption. Such a massive increase in domestic consumption has been due to increase in population, greater urbanisation, increase in income and standard of living etc. In Darjeeling, one can find around 1,00,000 tourists per year in all seasons. We expect to easily generate sales to existing committed tea drinkers, who will immediately recognize the quality of our products and services. Marketing to the much larger local groups who are not yet familiar with premium teas will emphasize our atmosphere (cosy, intimate, luxurious), our prestige-value (high prices, the sophistication of having a favourite "exotic" tea type), and our wide array of potential gifts (gift baskets, chocolates, loose teas and tea accessories). Sales to tourists depend on a highly-visible location, association with the quaint charm of Darjeeling, and promotional efforts in cooperation with other local businesses. We have no direct competitors in our area. The local Teashops cannot compete with our upscale approach, and we have a tie-up with the nearest hotel, Shangri-la. The owners are investing 10 lakhs of their own money into the business. Nishanjali Teahouse is seeking an additional 5 year loan of Rs 21, 98,150 to fund our start-up costs.

LOGO OF THE COMPANY

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MEANING
N : NEW IDEAS E PEAK; ON INUOUS GROW A : DESIRE O REA V : OPENNESS O E NEWER S AR : E DESIRE O BE NUMBER ONE RED OLOUR : AGGRESSIVENESS BLUE OLOUR : FLEXIBILI Y

Motto of the

omp n

Treati g every i ivi al customer as a very special and meeting their requirements to the best possible satisfaction is the motto of this generation. We will carry forward the goodwill of QUALITY & TASTE further following the footsteps of our elders and constantly improvising the service, quality and taste of our products. 7

Mission
Our goal is to provide the finest premium teas and chocolates to residents of the Darjeeling in a relaxed and fun atmosphere.

Objectives
y y y y

To operate a successful tea shop along with giving of premium chocolates in Darjeeling, employing one to two employees the first year. To obtain a minimum of 200 regular customers in the Nishanjali Teahouse in the first year of operation. Achieve first year sales of Rs 97,12,250. To produce a reasonable net profit by the end of the third year of operation.

Keys to Success 1. Experienced Owners or Managers: Anjali Jayadev and Nisha Jain have years of experience in this and related industries. 2. Product Quality: We sell only the finest whole-leaf loose teas, pastries, and chocolates. 3. Excellent Customer Service: Each customer will be treated as would an honoured guest in our homes. 4. No direct competition: We are the only teahouse in 20 miles. 5. Enough working capital to survive the first year as we build a customer base. 6. Broad cross-seasonal offerings: In addition to hot teas, we offer iced teas, chocolates, and gift baskets to cover seasonal variations in customer demand.

COMPANY INTRODUCTION
Nishanjali Teahouse is a start-up business on a well-trafficked street in Darjeeling. Our primary focus is in the over 50 kinds of loose tea we offer, including black teas, green teas, herbal teas (infusions), and flavoured teas (black or green tea plus other flavours). We serve our teas hot and iced, and sell loose teas by the ounce. In addition, we sell premium chocolates and gift baskets, and offer daily pastries to accompany tea orders.

After water, tea is the most widely consumed beverage in the world. It has a cooling, slightly bitter, astringent flavour which many enjoy There are at least six varieties of tea: white, yellow, green, oolong, black, and pu-erh of which the most commonly found on the market are white, green, oolong, and black. All teas are made from the same species of plant, though different varieties may be used, and the leaves are processed differently, and, in the case of fine white tea, grown differently Tea is traditionally classified based on the techniques with which it is produced and processed.
     

White tea: Wilted and unoxidized Yellow tea: Unwilted and unoxidized, but allowed to yellow Green tea: Unwilted and unoxidized Oolong: Wilted, bruised, and partially oxidized Black tea: Wilted, sometimes crushed, and fully oxidized Post-fermented tea: Green tea that has been allowed to ferment/compost

The traditional method of making a cup of tea is to place loose tea leaves, either directly, or in a tea infuser, into a tea pot or teacup and pour hot water over the leaves. After a couple of minutes the leaves are usually removed again, either by removing the infuser, or by straining the tea while serving. Most green teas should be allowed to steep for about two minutes, although some types of tea require as much as ten, and others as little as thirty seconds. The strength of the tea should be varied by changing the amount of tea leaves used, not by changing the steeping time. Pu-erh tea is also called Pu'er tea. Pu-erh teas require boiling water for infusion. Some prefer to quickly rinse pu-erh for several seconds with boiling water to remove tea dust which accumulates from the aging process. Infuse pu-erh at the boiling point (100 C or 212 F), and allow to steep for 30 seconds or up to five minutes. 9

Much flavouring is added to varieties of tea during processing. Among the best known are Chinese Jasmine tea, with jasmine oil or flowers, the spices in Indian Masala chai and Earl Grey tea, which contains oil of bergamot. A great range of modern flavours have been added to these traditional ones. In eastern India people also drink lemon tea or lemon masala tea. Lemon tea simply contains hot tea with lemon juice and sugar. Masala lemon tea contains hot tea with roasted cumin seed powder, lemon juice, black salt and sugar which gives it tangy, spicy taste. Other popular additives to tea by the tea-brewer or drinker include sugar, liquid honey or a solid Honey Drop, lemon (traditional in Russia and Italy), fruit jams, and mint. In China sweetening tea was traditionally regarded as a feminine practice. In colder regions such as Mongolia, Tibet and Nepal, butter is added to provide necessary calories. Tibetan butter tea contains rock salt and dre (yak) butter, which is then churned vigorously in a cylindrical vessel closely resembling a butter churn. The same may be said for salt tea, which is consumed in some cultures in the Hindu Kush region of northern Pakistan. Our company distributes tea bags also. Tea leaves are packed into a small envelope (usually composed of paper) known as a tea bag. The use of tea bags is easy and convenient, making tea bags popular for many people today. However, the tea used in tea bags has an industry nameit is called fannings or "dust" and is the waste product produced from the sorting of higher quality loose leaf tea, although this certainly is not true for all brands of tea, especially in the case of many specialty, high quality teas now available in bag form It is commonly . held among tea aficionados that this method provides an inferior taste and experience. The paper used for the bag can also be tasted by many, which can detract from the tea's flavor. Because fannings and dust are a lower quality of the tea to begin with, the tea found in tea bags is less finicky when it comes to brewing time and temperature.

Compressed Tea, Canned Tea and Instant Tea are also served at Nishanjali Teahouse.

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Tea varieites are also given in gift packages to tourists mainly such as Castleton Moonlight, Turzum Organic, Dooteriah White Delight, Thurbo Clonal and Namring Clonal.

And in order to attract the customers the tables are so arranged with colourful napkins and Mugs so that they would feel the place to be home.

Alongwith this chocolates that too premium chocolates are also served which tourists love the most such as Ten Minutes Truffles, Vintage Chocolates and WOW Chocolates and many others.

Other than this, gift baskets are also given to tourists for packing the teabags etc. in order to avoid huge tax rates. Pastries are also provided which brings in a mouthwatering feeling among the customers. 11

Gf it

Gift Baskets are also provided alongwith the variety of Tea which are 52 in number for packing purposes and attracting the customers mainly tourists .

About Darjeeli Darjeeling lovingly called the Queen of hill station never ceases to beckon those who are enamoured of the Himalayas with its celestial charm. Its beauty changes in tune with the changes in the seasons. Darjeeling, known as the queen of the Himalayas is situated i the n Northern Part of the Indian state of West Bengal. The city is located in the Siwalik Range of the lesser Himalayas and is famous for its tea industry. The city is also famous for the Darjeeling Himalayan Railways which is one among the UNESCO World Heritage List. There are a large number of tourist destinations in Darjeeling making this place a wonderful holidaying experience. Touristplacesinindia.com offers you complete guidance on all that you want to know about Darjeeling. To the east, a dull orange sun emerged painting the sky with brilliant strokes of magenta, gold, orange and fuchsia. The snow capped Everest, Kabru, Kanchenjunga, Jannu and other peaks slowly emerge from slumber to start a new day. As the fog lifts in the slowly penetrating sun, the town gradually comes alive. Amidst brewing of tea, the sing song Gorkhali which is the local dialect, rises and falls like music. There are a large number of Star, Heritage and Budget hotels which provide wonderful accommodation facilities in the city. The most important among them include the Windamere Hotel, Hotel Ivanhoe, Fortune Hotel Central, Himalayan Resort, Sinclairs, Anand Palace and Bellevue Hotel to name a few. The city has also a very good transportation network with Bagdogra being the nearest airport and New Jalpaiguri being the nearest railway station. National Highway No. 55 passes through the city connecting Darjeeling with other parts of the Country. Touristplacesinindia.com is an international travel site and a repository of useful information about Darjeeling and on other related information about the city. 12

Company Ownership As a Private Limited Liability Company in Darjeeling, ownership of Nishanjali Teahouse is identified as belonging to its managers. These partners, Nisha Jain and Anjali Jayadev, each control 50% of the business. Anjali Jayadev has five years of experience managing a successful boutique coffeehouse in a similar locale in Munnar, Kerala. Her love and knowledge of teas will make the transition to owning and running a teahouse a natural step. Nisha Jain has 3 years of training as a herbalist and worked for 4 years as a tea tender in Assam. She is currently training to be a nutritionist; her knowledge of the health benefits of tea will help our marketing and sales efforts.

Start-up Summary
Equipment and Inventory will make up 75% of start-up requirements. Leasehold improvements and general expenses comprise the remaining 25%. The owners are contributing Rs 10, 00,000 of investment to the business, each contributing Rs 5 lakh. We need a total of Rs 31, 98,150, and are seeking a long-term loan of Rs 21, 98,150 from Bank of Baroda; we plan to pay this loan back in full within 5 years, at a 14.25% interest rate. Long-term Assets, Rs 6,90,400
y y y y y y

Refrigerated Chocolate Case: Rs 1,75,000 Tea Racks: Rs 1,15,000 Coffee Maker: Rs. 45,400 Hot Water and Steam machine: Rs 55,000 Dishwasher: Rs. 1,50,000 Other Hardware & Appliances: Rs. 1,50,000

Short-term Assets, Rs 3,30,250

y y y

Coffee Grinder: Rs 28,200 Iced Tea Shakers: Rs 27,050 Furniture: Rs. 2,75,000

Expensed Supplies, Rs 60,000

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Amount(in Rs.)
2,500,000

2,000,000 1,500,000
Amount(in Rs.) 1,000,000

500,000
0

Expenses

Assets

Investment

Loan

Start up Requirements: Start up Expenses: Legal Stationery Brochures Insurance Rent Leashold Improvements Start up Supplies Dishes, Teacups, Teapots Other Total Start up Expenses Rs 37,000 Rs 40,000 Rs 10,000 Rs 25,000 Rs 1,50,000 Rs 5,00,000 Rs 60,000 Rs 1,00,000 Rs 5,000 Rs 9,27,500

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Start-up Assets Cash Required Start-up Inventory Other Current Assets Long-term Assets Total Assets Total Requirements Rs 7,50,000 Rs 5,00,000 Rs 3,30,250 Rs 6,90,400 Rs 22,70,650 Rs 31,98,150

Start-up Funding

Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required

Rs 9,27,500 Rs 22,70,650 Rs 31,98,150

Assets: Non-cash Assets from Start-up Cash Requirements from Start-up Rs 15,20,650 Rs 7,50,000

Additional Cash Raised Cash Balance on Starting Date Total Assets

Rs 0 Rs 7,50,000 Rs 22,70,650

Liabilities and Capital Liabilities

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Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills)

Rs 0 RS 21,98,150 Rs 0

Other Current Liabilities (interest-free)

RS 0

Total Liabilities

RS 21,98,150

Capital Planned Investement Owners Other Additional Investment Requirement Rs 10,00,000 Rs 0 Rs 0

Total Planned Investment

Rs 10,00,000

Loss at Start-up (Start-up Expenses): Total Capital Total Capital and Liabilities Total Funding

(Rs 9,27,500) (Rs 72,500) (Rs 22,70,650) (Rs 31,981,50)

Products a d Services
Nishanjali Teahouse will specialize in premium teas, fine chocolates, and gift baskets. Our full "teahouse" experience is complemented by an assortment of loose teas, premium 16

chocolates, tea accessories and gift baskets, all suitable as souvenirs and gifts for our tourist customers. Our goal is to be a destination store for visitors and a resource for locals seeking gifts, new experiences, and knowledge of tea. 52 kinds of tea Our tea-tenders will know the best brewing temperature and time for each of the 52 kinds of teas we offer. These include straight black teas such as Assam, Ceylon, Darjeeling and Keemun, blends like Chai, Earl Grey, and our own creatio like "New Tajmahal Garden ns, Party," a Ceylon or Vanilla or Jasmine blend. We will also offer a range of green teas . Nishanjali Teahouse's no-caffeine herbal infusions range from flavoured rooibus to fruit blends and medicinal brews (chamomile, ginseng, etc.). All of these teas are available hot, iced, or loose for customers to take home and brew at their leisure.

1) Pastries To complement our beverages, we will offer a small selection of freshly -baked pastries from a local bakery. Our alliance with this bakery allows us to offer high-quality baked goods at a reasonable price, in exchange for co -advertising. These items are not intended as a staple of our overall profit structure, but help us to create the whole-service feeling of a real teahouse, without investing in cooks, bakers, or kitchen equipment. 2) Chocolates In keeping with our upscale, indulgent feeling, we will sell p remium chocolates such as Ten Minute Truffles, WOW, as well as environmentallyfriendly ones like Dagoba and vegan chocolates. We will offer a limited selection of truffles and dipped chocolates (like chocolate covered cherries, orange peel, and candied ginger), and a wider array of loose bars and chocolate gift baskets. 3) Coffee We are a teahouse; we focus on tea. We brew only one kind of coffee daily, to satisfy those accompanying true tea lovers on their visits to our store. 4) Tea paraphernalia Tea paraphernalia includes specialty teapots, tea balls, decorative tea tins, "art of tea" books, and various small, seasonal, non-foods, tea-related items. 5) Gift Baskets We offer a selection of pre-made gift baskets, and will work with customers to create custom baskets for any occasion. Our tea tins come in a range of si es and designs, and we will keep at least five colours of baskets and liners in stock at all times. 17

MARKET ANALYSIS SUMMARY

The Tea Market

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The tea industry in India is about 172 years old. It occupies an important place and plays a very useful part in the national economy. While at the time of Independence only 79 Million Kilograms or about 31% of total production of 255 Million Kilograms of tea was retained for internal consumption, in 2008 as much as 802 Million Kilograms or about 82% of total production of 981 Million Kilograms of tea went for domestic consumption. Such a massive increase in domestic consumption has been due to increase in population, greater urbanisation, increase in income and standard of living etc. Indian tea export has been an important foreign exchange earner for the country. There was an inherent growth in export earnings from tea over the years. Till 70s, UK was the major buyer of Indian tea Since 80s USSR became the largest buyer of Indian tea due to existence of the trade agreement between India and erstwhile USSR. Tea is an essential item of domestic consumption and is the major beverage in India. Tea is also considered as the cheapest beverage amongst the beverages available in India. Tea Industry provides gainful direct employment to more than a million workers mainly drawn from the backward and socially weaker section of the society. It is also a substantial foreign exchange earner and provides sizeable amount of revenue to the State and Central Exchequer. The total turnover of the Indian tea industry is in the vicinity of Rs.9000 Crores. Presently, Indian tea industry is having 1692 registered Tea Manufacturers, 2200 registered Tea Exporters, 5848 number of registered tea buyers, Nine tea Auction centres. Spurred by studies touting tea's health effects, and increasing familiarity with Asian and South Asian cuisine and its tea customs, every consumer has been turning towards tea as a more original, more "natural" affordable luxury. In addition, the cultural connection of tea has made tea knowledge, including the choice of a favourite teahouse, a mark of sophistication among all the classes of people. The major competitive countries in tea in the world are Sri Lanka, Kenya, China and Indonesia. China is the major producer of green tea while Sri Lanka and Indonesia are producing mainly orthodox varieties of tea. Kenya is basically a CTC tea producing country. While India is facing competition from Sri Lanka and Indonesia with regard to export of orthodox teas and from China with regard to green tea export, it is facing competition from Kenya and from other African countries in exporting CTC teas.

The Chocolate Market Premium chocolate represents a fast-growing and dynamic market in many parts of the world, with global sales having risen by over 18% within the last year. Sales and consumer awareness are both growing for a variety of reasons - these include wider availability of premium chocolate at the retail level and high levels of new product activity. Premium chocolates such as Vintage Chocolates, Ten minute Truffles, WOW etc are preferred throughout India.

Market Size 19

Locals According to the 2001 census, the Darjeeling urban agglomeration, with an area of 12.77 km2 (4.93 sq mi) has a population of 109,163, while the municipal area has a population of 1, 07,530. Darjeeling has seen a significant growth in its population, with its average growth rate being 47% between 1991 and 2001. The total population of Darjeeling is 1,609,172 and there is growth of 23.54 since 1991. Tourists Indias performance in tourism sector has been quite impressive. During the period 2002 to 2009, India witnessed an increase in the Foreign Tourist Arrivals (FTAs) from 2.38 million to 5.11 million. Foreign Exchange Earnings (FEEs) from tourism increased from Rs. 15,064 crore in 2002 to Rs. 54,960 crore in 2009. The growth rate in earnings in 2009 vis-a-vis 2008 was 8.3 per cent. Thus, we estimate a potential market of atleast 1,00,000 tourists annually for our business. Market Segmentation While we anticipate a split between locals and tourists, all members of our target market are between the ages of 25 and 60, and have a moderate to si able disposable income.

Market Analysis:

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Potential Customers Local Residents Tourists Total

Growth 5% 3% 3.19%

Year 1 10,000 1,00,000 1,10,000

Year 2 10,500 1,03,000 1,13,500

Year 3 11,025 1,06,090 1,17,115

Target Market Segment Strategy

Nishanjali Teahouse will provide the local upper-middle-class community with a place to socialize, indulge themselves with fine teas and pastries, and find unique chocolates and tea for gifts. For tourists, Nishanjali Teahouse will be a destination stop in their tour of the town, whether as a break from shopping, a warm-up visit after skiing, or a place to buy unique gifts mainly tea varieties which they would not get in any other nearby place in Darjeeling well packed as souvenirs of their holiday. These customers will be glad to pay the price premium for our products in exchange for the high quality, great taste, and sense of prestige they receive and want to buy "only the best.

Service Business Analysis

The tea market is not a relatively new concept as Darjeeling is known for its tea. At Nishanjali, variety is seen as it just doesnt offer tea but also lots of varieties in tea, chocolates, gift baskets etc. None of these options is geared toward the tea drinker, and none of them offer the convenience or upscale feeling, let alone knowledgeable service, available at Nishanjali Teahouse. Word of mouth, visibility, and year-round tourist appeal are very important for a teahouse's success in areas like Darjeeling which is famous for tea. Tea Myths
y y y y

Most people do not consume tea as a morning ritual as they do with coffee. Tea is consumed in the afternoon and before bed. People drink tea only during cold weather, making the business seasonal. Tea is associated solely with the image of old ladies, china cups.

Tea Facts
y y y y

Tea is growing in popularity and more people are drinking tea in the mornings as a substitute for coffee. Tea is being consumed throughout the day; its milder caffeine effect allows for multiple cups without the "jitters." Today's tea drinkers do not limit their purchases to one season, but drink tea all year long. Tea has become the drink of choice for today's baby boomer, and tea's health effects are giving tea a more active, youthful, and healthy image.

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Premium Chocolate Sales In Nishanjali Teamarket, the premium and near-premium chocolate market is made up of three major competitors. 1. Premium. Premium chocolate boutiques have a small network of dealers or company owned outlets throughout the country that are chosen based on the high image of the outlet. Some outlets represent the manufacturer exclusively; others carry multiple high end chocolates. Nishanjali Teahouse offers only premium chocolates.

Strategy and Implementation Summary We will combine heavy print advertising with special events and targeted promotions to introduce Darjeeling's residents and tourists to Nishanjali Teahouse, and to premium teas in general. Repeat sales depend on consistently high quality products and service. We will thus train every part-time tea tender in the proper storage, brewing, and serving of our 52 kinds of tea. Our teas and chocolates are offered at a price premium that discourages customers seeking cheap, low-quality goods. This not only enhances the feeling of prestige customers get when patronizing our teahouse, but also ensures that customers will have similar expectations of service and quality, based on their socio-economic class. The status and sophistication indicated by suggesting an outing to Nishanjali, or a gift basket with our logo on it, will soon become valuable in themselves.

S O ANALYSIS WT Competitive Edge 22

Key Competitive Strengths

y y y y y y y

Anjali Jayadev's experience managing a successful boutique coffeehouse in a similar locale. Nisha Jains four years of experience as a tea tender, and 3 years of training as an herbalist. We are the only full-scale teahouse within 20 miles. We have arranged competitive distribution contracts with high-end tea growers around the world. We are the only retailer offering such a wide array of premium chocolates east of the river. Our interior design will give Nishanjali Teahouse an intimate, cosy, comfortable, and chic feeling, without reminding customers of doilies and lace. We are committed to providing only high-quality products and services.

Competitive Weaknesses Our primary weakness is that we are a new business competing against established chains, for customers who may not know how great our products are. To significantly build sales, we must not just find new customers - we must take customers away from existing stores and from their coffee-drinking habits. We can accomplish this only by offering a superior selection of teas and chocolates, and focusing on high-quality service and full service delivery. Competition and Buying Patterns In the gourmet teahouse industry, competition depends on quality of teas, knowledgeable tea tenders, and cultivation and education of a loyal customer base. Consumers used to Lipton teabags and other low-quality, tea-dust offerings in grocery stores are amazed at the range of tastes, textures, and fragrances from real, high quality tea. Offer them a good cup, and they will usually return for the rest of their lives. However, getting them to enter your store in the first place can be a major challenge. Our potential customers vary in knowledge of tea, and are seeking a wide range of experiences and products. Tea Drinkers: Tea drinkers are looking for a pleasant, relaxing place in which to indulge their love of tea, share it with friends, and learn more about tea varieties, cultivation, and health properties. Committed tea drinkers will always choose quality over price or convenience, seeking out the freshest whole-leaf and tippy varietals in the area. Our challenge with these consumers is getting out the word that we are here, and holding events to showcase our quality. Tourists: Tourists vary widely in their reasons for visiting Darjeeling, but they generally share a sophisticated urban palate, a moderately high disposable income, and a desire to "discover" quaint local charm. They are seeking high-quality foods, beverages, gifts, and service. While here, they much prefer local, small-scale businesses to larger chains, but want to be assured of quality. Our challenge with tourists is being visible enough to be noticed, without losing our local charm. Once such a visitor has tried our teahouse, they will definitely want to return. 23

Other Potential Customers:

y y

New Tea Drinkers (who have never tried good tea) Health-Food Afficionados

MARKETING AN D SA L E S STRATEGY
Our marketing strategy needs to accomplish two things: 1) To make potential customers aware of Nishanjali Teahouse's opening and location; 24

2) To educate potential customers as to what a teahouse is, and why it is so wonderful. Clearly, with committed tea drinkers, the first will suffice. However, for the rest of our target market, we must strategically define ourselves as the answer to the many different things each group is seeking. The marketing budget will not exceed 3% of our gross annual sales. Tea Drinkers
y y

Advertisements in the "entree" and food sections of all local papers within a 30 miles radius. Ads in the local newspaper namely Darjeeling Times.

Socializers Appeal to their sense of prestige and good taste. Within the local market, we will initially target women looking for an intimate social gathering space. A cosy chat over a cup of tea is just right for exchanging gossip, planning outings, or simply relaxing and pampering oneself.
y y

Advertise through religious organisations and women's organizations. Monthly "Tea Tasting" party with a different theme each month.

Tourists
y

Walk-ins: In mild weather (Spring through Autumn), our best chances are to increase the visibility of our store to encourage visits from tourists strolling through downtown. The storefront design (in our highly visible location) will include our name and logo, and we will place standing signs pointing towards our store at both nearby intersections. Our menu, prices, and hours will be posted in the windows at all times. Destination Visitors: We will place ads in the programs of all plays, operas, and other cultural events in Darjeeling throughout the year, billing ourselves as a "mini-getaway" from the pace of urban life. We will provide brochures in every local historical site, visitor's centre, and state park information booth.

Alliances with local Inns: Each guest staying at a local inn such as Shangri-La Hotel will receive a coupon for a half-price pot of tea at Nishanjali Teahouse, along with a brochure.

Sales Strategy Because Nishanjali Teahouse is a new entity, we understand that we will have to prove our company's worth to upscale tea and chocolate buyers in order to earn their respect and business. Our Sales Forecast depends on establishing a loyal customer base who visits our teahouse at least once every month; we expect a few committed tea drinking "regulars" who will come in more than once a week. In order to achieve this kind of repeat business, every customer, whether on the first visit or their hundredth, will be treated graciously and with respect. Part of our mission is to educate our customers about tea and tea brewing; however, this must only be done in a respectful fashion. Our knowledge is a resource, and must never be used to make a customer feel uncomfortable or ignorant.

Tea Profile 25

In addition to our extensive menu describing all 52 teas, Nishanjali Teahouse has developed a "Tea Profile" card for new tea drinkers, or customers looking to broaden their tea experience. These cards include questions about taste preferences which will help our tea tenders guide the customer to a tea they will enjoy. Our teas vary widely in taste, aroma, smokiness, fruit, and pungency, and very few people will enjoy them all equally. A customer who finds his or her personal tastes met is much more likely to be a repeat customer than one who simply orders a popular tea.

Tea Tasting Plates Every week we will offer a different selection of our teas as a "tasting:" 4 to 5 small cups of different teas, labelled and described, with appropriate pastry accompaniments. These plates will allow customers to try new kinds of tea without committing to a full pot. These tastings will be priced at 1 1/2 times the price of a regular pot.

Sales Forecast
We expect sales to start off conservatively and increase extensively during the Christmas, Valentine's Day, Easter and Mother's Day holidays, Durga Pooja, Diwali, and New Year. Nishanjali teahouse expects average sales of just over Rs 4,62,500 per month for the first year, as we build name recognition and status in the community. In the second and third year we look to see increased sales of roughly 10% per year, as we gain a larger percentage of the market share and increase our customer base beyond Darjeeling and into the connecting towns. Pricing
y

y y

y y

Hot Tea: We offer two sizes of sit-down hot tea: small pots, at Rs 20 each, and large pots, at Rs 45 each (for two people). For customers wishing to take tea with them, we offer a flat rate of Rs 30 for a 73ml. Iced Tea: Iced Teas are served in 355 ml. or 473ml. cups, at Rs 75 to Rs 125, respectively. Pastries: Our pastry prices range from Rs 30 for a lavender-lemon sugar cookie to Rs 75 for a slice of cake. Prices depend on our daily cost of such items from the local bakery, and should be only Rs 10 to Rs 12 higher than the price of that item sold in the bakery itself. Chocolates: Chocolate prices vary widely, from Rs 30 to Rs 1200. Gift Baskets: Gift baskets start at Rs 500, and can range up to Rs 7,500 for the largest chocolate and tea selection combinations at holidays. We expect the average gift basket sale will be about Rs 1250.

Sales Forecast Year 1 Sales Hot Teas Iced Teas Rs 26,20,000 Rs 11,20,000 Year 2 Rs 31,00,000 Rs 12,00,000 26 Year 3 Rs 33,00,000 Rs 12,75,000

Pastries Chocolate Tea Paraphernalia Gift Baskets Loose Teas Total Sales

Rs 7,20,000 Rs 44,00,000 Rs 1,50,000 Rs 1,94,750 Rs 5,07,500 Rs 97,12,250

Rs 7,50,000 Rs 46,00,000 Rs 1,60,000 Rs 2,00,000 Rs 5,46,000 Rs 1,05,56,000

Rs 8,00,000 Rs 50,00,000 Rs 1,70,000 Rs 2,10,000 Rs 6,55,200 Rs 1,14,10,200

Direct Cost of Sales Hot Teas Iced Teas Pastries Chocolate Tea Paraphernalia Gift Baskets Loose Teas Subtotal Direct Cost of Sales

Year 1 Rs 7,86,000 Rs 3,58,400 Rs 4,75,200 Rs 19,80,000 Rs 75,000 Rs 77,900 Rs 2,03,000 Rs 39,55,500

Year 2 Rs 9,30,000 Rs 3,84,000 Rs 4,95,000 Rs 20,70,000 Rs 80,000 Rs 80,000 Rs 2,18,400 Rs 42,57,400

Year 3 Rs 9,24,000 Rs 3,82,500 Rs 5,12,000 Rs 21,50,000 Rs 79,800 Rs 79,800 Rs 2,49,000 Rs 43,80,600

MANAGEMENT SUMMARY
We are a small company owned and operated by Anjali Jayadev and Nisha Jain, as a Limited Liability Corporation. Anjali Jayadev is the designer and marketer of the products and Nisha Jain manages the store. As mentioned above, both partners have extensive experience in this and related industries, and will be leveraging their knowledge of tea purchasing, brewing, and 27

marketing, as well as knowledge of running small upscale beverage business, to create success for Nishanjali Teahouse. Our management style reflects the participation of the owners; we are not very hierarchical, and encourage all employees to learn as much as possible about all aspects of the business. The company respects its community of co-workers, and will treat all workers well.

Personnel Plan The Personnel Plan chronicles the growth of the organization to approximately 4 employees in the first 3 years. Future years may require a few additional people besides those indicated, depending on the growth of the company. Personnel Plan Year 1 Anjali Jayadev Nisha Jain Part-time tea tenders Total People Total Payroll Rs 12,00,000 Rs 3,00,000 Rs 6,80,000 4 Rs 21,80,000 Year 2 Rs 15,00,000 Rs 6,00,000 Rs 7,00,000 4 Rs 28,00,000 Year 3 Rs 17,50,000 Rs 7,00,000 Rs 7,25,000 4 Rs 31,75,000

Financial Plan Our Financial Plan is based on sound research into similar businesses in similar communities, and cost estimates obtained for equipment, rent, and other operating expenses. As an owneroperated business, we have some leeway in adjusting our own compensation if sales are low in a given month, but our forecasts are conservative. Our top financial priorities in the first three years are repaying our long-term loan, paying our employees fairly, covering our expenses on time, and generating a modest profit. We have taken a shop on rent in Darjeeling near to Shangri-la Hotel with 600 sq.ft. We are opening this shop in Darjeeling as it is firstly a cold place, and tea is an essential beverage consumed by each and every individual. And it is a place where one can find a wide variety of teas alongwith pastries, gift boxes and chocolates. We are opening this shop because we love tea and we will enjoy all the hard work we must do to maintain the business. We do not expect to get rich doing this, but we do anticipate steadily increasing profits and net worth as Nishanjali Teahouse becomes well-known and establishes a loyal clientele. Company expansion, while not a necessity, will be an option if sales projections are met and or exceeded. The location we have chosen contains an additional area we can annex for extra seating if and when it becomes necessary, for a small additional rental charge. Important Assumptions 28

Tax and interest rate assumptions for this plan are on the following table. In addition, there are some non-financial assumptions guiding our forecasts. We assume:
y y y y y

No other teahouses opening in Darjeeling in the next year. (A safe assumption) A continued gradual increase in the population and socio-economic class of the Darjeeling area. Continued tourist interest in our area. Increasing consumer interest in tea and other "health" foods. That premium chocolate will continue to symbolize luxury and romance as gift choices.

Direct Cost of Sales Direct Cost of Sales Hot Teas Iced Teas Pastries Chocolate Tea Paraphernalia Gift Baskets Loose Teas Subtotal Direct Cost of sales Month 1 Rs 2,25,000 Rs 40,000 Rs 39,600 Rs 67,500 Rs 6,250 Rs 4,000 Rs 12,000 Rs 1,91,850 Month 2 Rs 37,500 Rs 48,000 Rs 39,600 Rs 67,500 Rs 6,250 Rs 4,400 Rs 10,000 Rs 2,58,250 Month 3 Rs 45,000 Rs 60,800 Rs 39,600 Rs 67,500 Rs 6,250 Rs 4,500 Rs 10,000 Rs 3,46,150

Personnel costs on a monthly basis Direct cost of Sales Anjali Jayadev Nisha Jain Part-time tea-tenders Total People Total Payroll General Assumption: Month 1 1 9.50% 14.25% Month 2 2 9.50% 14.25% 30% 0 Month 2 Rs 6,33,500 Rs 2,58,250 Rs 2,58,250 Rs 0 Rs 2,58,250 29 Month 3 3 9.50% 14.25% 30% 0 Month Rs 8,48,750 Rs 3,46,150 Rs 3,46,150 Rs 0 Rs 3,46,150 Month 1 Rs 1,00,000 Rs 25,000 Rs 50,000 3 Rs 1,75,000 Month 2 Rs 1,00,000 Rs 25,000 Rs 50,000 3 Rs 1,75,000 Month3 Rs 1,00,000 Rs 25,000 Rs 50,000 3 Rs 1,75,000

Plan Month Current Interest Rate Long-term Interets Rate Tax Rate 30% Other 0 Pro Forma Profit and Loss Sales Direct cost of sales Other costs of sales Total cost of sales Gross margin

Month 1 Rs 4,62,500 Rs 1,91,850 Rs 1,91,850 Rs 0 Rs 1,91,850

Gross margin % Expenses Payroll Marketing or Promotion Depreciation Rent Utilities Monthly disposable Supplies Insurance Payroll taxes Other Total Operating Expenses Profit Before Interest and Taxes EBITDA Taxes Incurred Net Profit Net Profit or Sales

58.52%

59.52%

59.22%

Rs 1,75,000 Rs 75,000 Rs 5,750 Rs 75,000 Rs 31,050 Rs 5000 Rs 20,850 Rs 0 Rs 0 Rs 3,87,650 Rs 1,11,250 Rs 1,11,250 Rs 41,200 Rs 96,150 -20.79%

Rs 1,75,000 Rs 15,000 Rs 5,750 Rs 75,000 Rs 31,050 Rs 5000 Rs 20,850 Rs 0 Rs 0 Rs 3,27,650 Rs 53,350 Rs 53,350 Rs 8,250 Rs 19,250 3.04%

Rs 1,75,000 Rs 15,000 Rs 5,750 Rs 75,000 Rs 31,050 Rs 5000 Rs 20,850 Rs 0 Rs 0 Rs 3,27,650 Rs 19,800 Rs 19,800 Rs 46,550 Rs 1,08,600 12.80

Pro Forma Balance Sheet: Assets Current Assets Cash Inventory Other Current Assets Total current amounts Long term Assets Long term assets Accumulated Depreciation Total Long term assets Total Assets Liabilities and Capital Accounts Payable Current Starting Balances Rs 7,50,000 Rs 5,00,000 Rs 3,30,250 Rs 15,80,250 Month 1 Month 2 Month 3

Rs 9,94,050 Rs 3,08,150 Rs 3,30,250 Rs 16,32,450

Rs 12,21,800 Rs 2,84,100 Rs 3,30,250 Rs 18,36,150

Rs 14,40,700 Rs 3,80,750 Rs 3,30,250 Rs 21,51,700

Rs 8,90,400 0 Rs 6,90,400 Rs 22,70,650

Rs 6,90,400 Rs 5,750 Rs 6,84,650 Rs 23,17,100

Rs 6,90,400 Rs 11,500 Rs 6,78,900 Rs 25,15,050

Rs 6,90,400 Rs 17,250 Rs 6,73,150 Rs 28,24,850

0 0

Rs 1,79,850 0 30

Rs 3,95,750 0

Rs 6,34,200 0

Borrowing Other current liabilities Subtotal current liabilities Long term liabilities Total liabilities Paid in capital Retained Earning Earning Total Capital Total Liabilities and Capital Net Worth

0 0 Rs 21,98,150 Rs 21,98,150 Rs 10,00,000 Rs 9,27,500 Rs 0 Rs 8,94,500 Rs 22,70,650 Rs 8,94,500

0 Rs 1,79,850 Rs 26,44,400 Rs 28,74,250 Rs 10,00,000 Rs 9,27,500 Rs 96,150 Rs 9,90,650 Rs 23,17,100 Rs 9,90,650

0 Rs 3,95,750 Rs 26,07,150 Rs 30,02,950 Rs 10,00,000 Rs 9,27,500 Rs 76,900 Rs 9,71,400 Rs 25,15,050 Rs 9,71,400

0 Rs 6,34,200 Rs 25,69,950 Rs 32,04,150 Rs 10,00,000 Rs 9,27,500 Rs 31,700 Rs 8,62,800 Rs 28,24,850 Rs 8,62,800

CONCLUSION
In the above business plan what we have seen that if we go for the implementation of the above plan definitely we will be successful because whatever data we have predicted that is taken after doing research. We have selected this business plan because I want to establish a Retail chain. We have chosen Darjeeling as the destination for opening up our shop because of the variety of teas 31

produced there, the number of tourists coming every year and the diversifying culture found there as well as the love for tea. As I have already discussed in my project that Darjeeling is the Queen of the hill station and a preferred place for tourists there are lots of development opportunities now and in future as well. There are few points to remember such as:
y y y y y

Before investment in machinery and furniture we have to explore the market in a proper manner. Before starting or set up business we have to be careful for our expenditure because there is no limitation of expenditure. We have selected the name under which we are planning to run our business that is NISHANJALI PRIVATE LIMITED. Nishanjali Private Limited will become one of the unique tea house in Darjeeling with its wide variety in tea, gift baskets, pastries and chocolates. We have selected the place Gandhi Road as it has a hotel nearby named as Shangri-la Hotel, because this is one of the opportunities for us to get tourists to taste the delicacies offered in our shop which would not be available there. In fact after doing research we came to know this market is very famous among tourist and localities.

At last but not the least I would like to thankful for my business partner Anjali Jayadev because it wont be possible to start this business without the help of her with complete support and dedication towards the business. We not only hope but also sure the one day our business will create a history in Darjeeling.

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