How to Start biscuit and cookies business plan in India? [Machine Prize, Method at home and factory] Investment and Profit
An average morning in any Indian home will not be complete without a cup of piping hot tea or coffee. But you need something to go with it. Biscuits and cookies will partner perfectly with a cup of hot beverage. When there is such a high demand for biscuits, then you can reap a significant benefit by starting a small scale or homemade biscuit venture.
Biscuit manufacturing at home
- Plan your business – Whether you desire to make cookies at home or in a manufacturing unit, you need to have a water tight business plan. You cannot make the cookies, and then search for places to sell them. When you have a good plan, only then set out on your path.
- Pick a bankable recipe – There are thousands of biscuit and cookie recipes to choose from. Once you find a good and unique recipe, it is time to analyze its sale potential.
- Make a list of ingredients – To make any biscuit or cookie, you will require some common ingredients. These are all purpose flour, baking powder, salt, sugar, butter and milk. Apart from these, flavoring ingredients like vanilla essence, chocolate chips, and coconut dust and others will depend on the recipe. It is best to purchase these in small quantities at first.
- Cost of ingredients – Baking powder costs around Rs. 20/pouch, flour costs Rs. 30/kg, salt costs Rs. 20 to Rs 25 for one kg pack, sugar costs Rs 40/kg, butter costs Rs. 35 per 100 gms, and milk costs Rs. 30 for ½ litter. A bottle of vanilla essence costs Rs. 20 to Rs. 30 per bottle. Choco chips cost Rs. 220/kg, coconut powder is Rs. 230 per kg.
- Utensils and machines – When making biscuits and cookies at home, you need not invest additional cash in attaining utensils. Every kitchen has these. Bowls, spoons, strainers, egg beater, water pot, milk jug, measuring cups, biscuit trays, microwave oven are some of the things you will need.
- Following the recipe – Each biscuit or cookie recipe is different, and calls for dissimilar preparation process. From mixing all ingredients to baking, you must follow measurements and instructions properly.
- Storing and packing – Once you take out the cookies from the oven, don’t forget to taste one. If you are happy with the texture and taste, then it is time to pack the product. Make sure to pack these only when they are cool. Make use of a vacuum sealer to make the packets airtight. These sealers cost between Rs.3500 to Rs. 4500.
Biscuit manufacturing in factories
- Planning is vital for success – When opening a biscuit and cookie manufacturing unit on a medium or large scale, then you will require better planning. From picking the recipe to identifying your clients, all must be done during initial days.
- Selection of the area – For setting up a small or medium manufacturing unit, you will need sufficient area. Place is necessary for storing raw ingredients, utensils, and keeping the commercial level machines. Rent a place that has enough room to hold all machines, and has space to spare.
- Attain necessary permits – After settling the issue of space, you need to get in touch with respective authority to get the clearance and permits. These are necessary to run business legally. Manufacture process can only start when the food and health department offers their seal of approval.
- Get necessary machines – To manufacture biscuit on a commercial level, you will need commercial grade machines. Any automatic biscuit manufacturing machine costs anything between Rs 3 lakhs to Rs. 6 lakhs. All you need is to pour in ingredients according to measurements. The mixing, kneading, cutting and baking will be done by this one machine.
- Attainment of ingredients – The list of raw materials will vary according to the selected recipe. As the commercial machines produce bigger batches, one will need these raw materials in proportional amounts. It is best to get in touch with whole sale suppliers of these materials.
- Packaging the biscuits – In commercial units, biscuit packaging is also done by machines. It is not possible for people to collect, place and pack so many biscuits manually. Multi-row biscuit packing machines are also available online. The cost of these machines starts from Rs. 2 lakhs.
- Selling the product – Once the biscuits and cookies have been packed, it is time to transport these to selling counters.
Ingredient And Equipment List
|Material for homemade cookies||Investment cost (Approx)|
|Baking powder||Rs. 20/pouch|
|All-purpose flour||Rs. 30/kg|
|Salt||Rs. 20 to Rs 25 per Kg|
|Vanilla Essence||Rs. 20 to Rs. 30 per bottle|
|Choco chips||Rs. 220/kg|
|Coconut Powder||Rs. 230/kg|
|Mixing bowls||Rs. 100|
|Spoon set||Rs. 200|
|Scooper & beater||Rs. 50|
|Baking trays||Rs. 150|
|Microwave oven||Rs. Rs. 4500 to Rs. 6000|
|Water & milk pots||Rs. 100|
|Total Investment = Rs. 6640|
|Equipment necessary in factories||Investment cost (Approx)|
|Biscuit making machine||Rs 3 lakhs to Rs. 6 lakhs|
|Multi-row biscuit packing machines||Rs. 2 to Rs 4 lakhs|
|Transportation expenses||Rs. 10,000 to Rs 15,000|
|Power expenses||Rs. 18,000 to Rs 25,000|
|Advertisement expenses||Rs. 40,000 (minimum)|
|Labor cost for 10 people||Rs. 1 lakh|
|Total Investment = Rs. 6 lakhs 70 thousand|
How many employees do you need?
The best think about starting a biscuit & cookie business is that you will have complete control on several aspects of the venture. If you desire to create a small batch of cookies or biscuits, then you can operate from your home kitchen, without any added assistance. To run a commercial but small scale factory, you will need no more than 3 to 5 associates.
How much capital investment do you need?
Biscuit and cookie making business is rather flexible, as far as expenses is concerned. A person can start a homemade cookie business with as low as Rs. 6000. It will only offer you enough supplies to create a small batch of biscuits and cookies. In case you want to take your business to the next level, then purchase an automated biscuit making machine. The cost of each unit is around 6 lakhs. Apart from the actual manufacturing process, you need to set aside around Rs. 2,000 to Rs. 3,000 for packaging and marketing. So, homemade cookie and biscuit business can be set up for Rs. 10,000.
Place for making the biscuits
If you want to concentrate on making products in small batches, then operating from your own kitchen will be an ideal option. Those who are thinking about a small unit that involves use of machines, it is best to rent a place. Make sure that the place has adequate water and electricity supply. You will need these for operating machines. Pay attention to connectivity as well. Try to rent a place that is within the city.
Proper packaging of the product
Biscuits and cookies are fragile and have a specific span. So, you need to pay attention to the packing of the product. If the packing is not up to the mark, then the cookies and biscuits will not stay fresh for long. Don’t go for fancy toffee wrapper styles. They only look good, but fail to keep the edibles fresh. You can purchase small vacuum sealing machines. These are easily available in the market. Apart from this, commercial biscuit wrapping machines are also available online. These will cost you a significant amount. Consider these only if you have a high production rate.
Marketing strategy and area
- Use the power of print media – If you wish to attain popularity at national level, you need to get a strong grip on local markets. Thus, spreading news in local circuits is a must. Publishing advertisements in print media will come to your rescue.
- Traditional audio-visual media – Local television channels and FM stations will play the role of promotional vehicles perfectly. Catchy jingles and interesting videos will create a strong impact on customers.
- Temporary stores at malls – Promoting your brand will become easy if you give out free samples of your mouth watering creation to customers who come to malls or super markets. Do not forget to highlight the brand name and contact details. It is possible by setting up temporary stalls at popular locations.
- Join hands with retailers – Homemade cookie and biscuit makers cannot reach a large number of clients. But retail store have that opportunity. Most Indians go to the grocery store in the locality. These are ideal promotional and sale platforms. You can share the profit to start with, and when the momentum picks up, reach an agreement with shop owners.
- Social media and online promotions – Profiles on Facebook, Twitter, Instagram and Myscape will come in handy to promote the products. You may also record and edit promotional videos and upload it on YouTube. One post on your profile will reach several others immediately. In case you want to create a serious online representation, then respective website is a must.
- Special offers – Initially you must be pushy. New clients will not be too eager to try the product. So, you must need to design special offers and discounts to attract their attention. This promotional technique will help you to make the sale. The rest depends on the potential of the food items.
- Talk to café and restaurant owners – Another place where you can sell your product is at cafes and restaurants. People from all sections come to these joints to enjoy a cup of tea of coffee. They will need something to much on. Your biscuits and cookies will be in great demand.
- In front of schools and offices – Students and office goers often munch on unhealthy fast food during lunch time. A pack of homemade biscuits or cookies will be a perfect alternative. Selling your product outside schools and offices will attract a lot of good attention.
Permits you need for the business
- Trade license – Trade license is a must for all companies, which want to join the business world and make considerable money.
- VAT registration – VAT is a new license that has been made mandatory by the Indian government.
- Brand name and logo registration – If you attain success in your initial trials and desire to set up a commercial bakery unit, then it is best to get your biscuit brand name and logo registered. It will provide adequate representation.
- Bakery permit – Biscuits, cookies, and baked goods are prepared in the bakery. Some standard must be maintained in respect to hygiene and equipment. Thus, a bakery permit will keep you away from unwanted legal issues.
- FDA permits – You will also need a license from the FDA to manufacture and sell biscuits and cookies, either from home or from a commercial unit.
- Insurance policies – No matter whether you make cookies at home or have a commercial unit, it is wise to get insurance. It will give you a cushion to fall back in case any accident takes place.
- Bank accounts – In case you want to maintain clean expenditure and income records, then you need to open and maintain a record in the name of the company. It is not mandatory for someone who operates from home.
- Business PAN Card – As soon as you apply for the trade license, when the business grows, it will become mandatory to get a PAN card issues in the name of your cookie brand.
How to fix the pricing of the products?
The primary motive behind selling the product is to gain some profit. It will depend on the selling price. But fixing the cost also includes lots of calculations. You need to add up all your expenses, and then come up with a selling price that will generate satisfactory revenue.
If you desire to sell your product in a posh area, then you can charge a high price. In case the locality has high percentage of meddle and low income group residents, then the selling price must be set accordingly.
Selling products directly to the clients will fetch you more profit. In that case, a low selling price will bring in more revenue. If you are taking the help of a middle man to sell the products, then you need to charge high price to keep your profit margin high.
Biscuit and cookie profit percentage
Firstly, if the quality of the product is not good, then you will lose your profit margin and customers with time. Secondly, your selling price must neither be too high nor too low. Using costly ingredients will force you to raise the selling price. If your clients are not ready to pay that amount, then you will not make any profits. If you open a shop, then you must select the location properly. Make products that will mainly attract the people living in nearby areas. Under normal circumstances, you will end up with making 35% to 40% profit on an annual basis. An initial profit of Rs. 3000 to Rs. 4000 might not seem much. It is not bad for a homemade small scale manufacturing unit. Plus, there is always the promise of making more profit in future.
Risks in biscuit business
There are mainly two risks involved in the biscuit and cookie manufacturing business. The main issue crops up when you do not get proper supplies. That is a major problem in Indian market. The quality of raw materials tends to vary from time to time. The quality of the end product will also change depending on the raw materials. It is necessary that you attain products from proper suppliers to maintain the quality. Food products have a limited shelf life. It is all the more short for homemade cookies. If manufacturers do not have enough space to store the biscuits, away from moisture, dust and fungus, then the profit percentage may drop.
Waste management techniques
Burnt and broken biscuits, sugar dust, wrappers, cardboard boxes, tins, cookie and biscuit trays, used or contaminated oil common waste products. Good news is these are recyclable. There are special dealers, who collect these biodegradable wastes, and out them to good use. If you have a medium unit, then you need to worry about this. Making small batches at home will not produce that much waste. Make it a point to construct proper drains, which will carry out the dirty water. Make two separate disposal bins for dry and wet waste.
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