Introduction
This business idea is for the production and marketing of biscuits. Biscuits are confectionary products, and they refer to small thin products of varying shapes. These tastes are of soft, brittle texture.
Different names in different countries refer to them. The revenue is estimated at 2,737,500 Naira per year. The payback period is short, i.e., two months and the net profit for this investment is 92%.
Production process
The process combines 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.
Capital Investment Requirements (CBN exchange rate -$1 to 411.928.20 NGN) as of 07 Jan 2022.
| Item | Quantity | Price per one
NGN |
Amount in NGN | Amount
In USD |
| Gas Oven | 1 | 75,000 | 75,000 | 182.07 |
| Dough mixer | 1 | 6000 | 6000 | 14.57 |
| Weighing scale | 1 | 2500 | 2500 | 6.07 |
| Tray pieces | 5 | 1000 | 5000 | 12.12 |
| Baking trays | 10 | 4000 | 40,000 | 97.10 |
| Packing materials | 50 | 100 | 5000 | 12.12 |
| Total | 133,500 | 324.09 |
Production and operating costs
|
Cost item |
@ NGN | Qty/day | Prod. Cost/
month-NGN |
Prod. Cost/ Year
NGN |
Prod. Cost/ Year
USD |
| Wheat Flour | 1000 | 1 | 30,000 | 360,000 | 873.94 |
| Margarine Nonfat | 900 | 500g | 27,000 | 324,000 | 786.55 |
| Baking Powder | 50 | 2 | 1500 | 18,000 | 43.69 |
| Milk powder | 1500 | 1 | 45,000 | 540,000 | 1,310.91 |
| Cooking oil | 1300 | 1 | 39,000 | 468,000 | 1136.12 |
| Salt | 100 | 1g | 3,000 | 36,000 | 87.39 |
| Sugar | 200 | 1.5 | 6,000 | 72,000 | 174.79 |
| Sub-total | 1,818,000 | 4,413.39 |
General costs (Overheads)
| Cost Per Month
NGN |
Cost Per Year
NGN
|
Cost Per Year
USD
|
|
| Utilities (power&water) | 2000 | 24,000 | 58.26 |
| Salaries | 5000 | 60,000 | 145.66 |
| Rent | 2000 | 24,000 | 58.26 |
| Total Operating Costs | 9000 | 108,000 | 262.18 |
Production costs assumed 312 days per year with a daily capacity of 50 packs of biscuits
Depreciation (fixed assets write off) assumes four 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 COST AND PRICE STRUCTURE
| Item | Qty/day | Qty/yr | @NGN | Pdn Cost/
yr NGN |
T/rev
NGN |
T/rev USD |
| Biscuits | 50 | 18,250 | 150 | 1,818,000 | 2,737,500 | 6,645.58 |
PROFITABILITY ANALYSIS TABLE
| Profitability Item | Per day | Per Month | Per Year
NGN |
Per Year
USD |
| Revenue | 7500 | 225,000 | 2,737,500 | 6,645.58 |
| Less: Production & Operating Costs | 5,100 | 153,000 | 1,862,100 | 4539.49 |
| Profit | 875,400 | 2125.13 |
Market Analysis
Biscuits are delicious to children and therefore have a ready market.
Schools, shops, street vending and market places, supermarkets are Potential buyers.
Sources of raw materials:
Raw materials are locally available.
