BAKING BISCUITS

Introduction
This business idea is for the production and marketing of biscuits. Biscuits are confectionery products and they refer to small thin products of varying shapes, tastes that are of soft brittle texture. They are referred to by different names in different countries. The revenue is estimated US$400 per year.

Production process
The process consists of combining wheat flour, sugar, margarine, milk and water in a dough mixer. The dough is then mixed with baking powder and kept for around three hours. The prepared dough is then passed through biscuit molding, stamping, and cutting machines and finally baked in an oven. The biscuits are then cooled, sorted and packed neatly.

Market Analysis
Biscuits have a ready market since they are delicious and conveniently packed. The main outlets are Supermarkets, Provision Stores, Canteens and Institutions. The major key players include; Britania and Riham.


Capital Investment Requirements in US$

Capital investment item

Units

Qty

Unit
cost

Amount

Brick oven

No.

1

2,500

2,500

Dough mixer

No.

1

1,250

1,250

Weighing scale

No.

2

100

200

Tray (pieces)

No.

4

10

40

Hand mould table

No.

1

50

50

Baking trays

No.

50

13

625

Packing materials (kg)

No.

200

1.5

300

Van

No.

1

6,500

6,500

Total Costs on Machinery

11,465




 

Production and Operating costs in US$

Cost Item

Units

Unit cost/
day

Qty/day

Prod
cost/
day

Prod
cost
/month

Prod cost
year

Wheat flour

kg

25

20

500

13,000

156,000

Sugar

kg

45

50

2,250

58,500

702,000

Cooking oil

Ltrs

32

40

1,260

32,760

393,120

Firewood

tone

50

3

150

3,900

46,800

Margarine

kg

1.25

12

15

390

4,680

Non fat milk
powder

kg

2

30

53

1,365

16,380

Salt

kg

0.3

5

2

39

468

Sub-total

 



3,729

109,954

1,319,448

General costs(overhead







Utilities(water and power)

50

600





Labour

50

600





Rent

125

1500





Miscellaneous costs

50

600





Depreciation(Asset write off)Expenses)

1

13





Sub -total

276

3313





Total Operating Costs

110,230

1,322,761





Production costs assumed 312 days per year with a daily capacity of 9000 biscuits Depreciation (fixed assets write off) assumes 4 years life of assets written off at 25% per year for all assets.

 Direct costs include materials, supplies and other costs that directly go into production of the product.


Project product Costs and Price Structure in US$

Item

Qty
/day

Qty/yr

Unit
Cost

Prod cost
/yr

Unit
Price

Total
revenue

Biscuits

9,000

2,808,000

0.47

1,322,761

0.5

1,404,000

 

Profitability Analysis

Profitability Item

Per day

Per
month

Per
Year

Revenue

4,500

117,000

1,404,000

Less production and operating
Costs

4,240

110,230

1,322,761

Profits

260

6,770

81,240