Business Plan Project ARCHANA SHARMA BBA19095.docx

business plan minor project

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Business Plan for the Star Bean Coffee House



A Project submitted in partial fulfillment of the
requirements for the award of the Degree of

BACHELOR OF BUSINESS
ADMINISTRATION

BY
ARCHANA SHARMA
(BBA19095)







FACULTY OF COMMERCE & MANAGEMENT
SARALA BIRLA UNIVERSITY, RANCHI



Batch 2019 - 2022

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ACKNOWLEDGEMENT


I would like to express my special gratitude towards the Sarala Birla University for
giving me the opportunity to do my Business Plan Project. Secondly, I would like
to express my special gratitude and thanks to my professor Dr. Mridanish Jha who
guided me throughout the project. He also helped me by sacrificing their personal
valuable time for the completion of this project report. And finally, I am very much
thankful to my friends and my parents who guided me during preparation of my
internship project







ARCHANA SHARMA

SIGNATURE WITH DATE

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CERTIFICATE OF APPROVAL


The project entitled “Business Plan for The Star Bean Coffee House”,
has been presented in satisfactory manner. It is understood that by this
approval, the undersigned do not necessarily endorse any conclusion drawn
or opinion expressed therein, but approve the project for the purpose for
which it is submitted.








(Examiner) (Guide)










(Dean)

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TABLE OF CONTENTS


SL.
Number
Contents Page
Number
I. Executive Summary 6
II. Company Description: 7
a. Structure & Ownership 7
b. Management team 7
c. Location 7
III. Environmental Scanning 8-11
a. SWOT Analysis 8
b. Industry structure & Competition 8-11
IV. Business Strategy 12
a. Vision 12
b. Mission 12
c. Objectives 12
V. Marketing Plan 13-15
a. Target Market description 13
b. Segmentation Strategy 13
c. 4 P’s Plan 14
d. Positioning, Differentiation & USP 14-15
VI. Technical or Operations Plan 16
a. Material requirement planning 16
b. Machinery & equipment 16
c. Cost of manufacturing and running operations 16
VII. Financial Plan 17-23
a. Projected cash flows 17-19
b. Projected income statement 20
c. Projected break-even point 21-22
d. Projected Balance sheet 23
VIII. Human Resource Plan 24-28

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a. Manpower requirements 24
b. Recruitment and selection 25-26
c. Compensation 27-28
IX. Bibliography 29

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Structure of the Business Plan


I. Executive Summary

The Star Bean Coffee House will be the go-to place for coffee lovers. We plan on serving the
highest quality coffee and snacks in a trendy, comfortable atmosphere. Our convenient location
and excellent customer service should build a steady repeat customer base. Our main products
will be higher margin gourmet coffee products such as espressos, cappuccinos, lattés, and a
variety of snacks, including healthy alternatives.

Strategically located within easy walking distance from the technical school, nursing colleges,
and a variety of office complexes like Sarala Birla University, Usha Martin College etc, we
intend to cater to students and young office workers by providing plenty of seating space and
superior customer service with a trendy vibe.

The Star Bean Cafe is the alternative to fast food/commercial/coffee shops and offers a much
calmer, civilized gourmet coffee experience. There are no televisions in the café, the background
music is subtle and work from local artists will hang on the walls. The café is well appointed
with overstuffed leather chairs and sofas in a library like setting. The café is reminiscent of times
gone by – yet is cutting edge technologically with WIFI and state of the art espresso machines.

The location we have selected has 2,000 square feet of space, room for an outdoor patio, and
requires minimal renovations. The space has been vacant for several months and the owner is
motivated and has offered a four-year lease with a fifth year free.

The keys to success will be the ability to offer quality gourmet coffees, take advantage of its
small size, and reliance on an outstanding barista staff. In order to achieve these goals, the café
will offer some the area’s finest gourmet beans from local distributors. Because of its small size,
the café can enjoy larger margins in the form of lower overhead. The cafe will have special staff
with development and intellectual disabilities such as autism, down syndrome and cerebral palsy

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II. Company Description-

The Star Bean will be a coffee house / café located in the, the cozy café will be located opposite
Sarala Birala Public School. The café will serve gourmet coffees, espresso and drip coffee,
lattes, and smoothies. The simple pastry offerings may vary with seasonality but the primary
line will be muffins, breads, cookies, scones, and rolls. All pastries will be supplied daily by a
local bakery. The café will be owned and operated by Owen Archana Sharma. The café will be
open for business Monday – Thursday 7-10, Fridays and Saturdays 7-11 and closed Sundays.

a. Structure & Ownership – The Star Bean Coffee House will be owned 100% by
Archana Sharma. Miss. Sharma a graduate of Sarala Birala University has an
undergraduate degree in business administration. During high school she worked as a
volunteer in hospital coffee shop that purchased its beans from a local roaster. In
addition to being an avid coffee drinker herself, this job allowed her to learn about the
business first-hand.
b. Management team- Owner Archana will manage the business with her well trained
and talented staffs with intellectual development disabilities those who will be present
at all times during open hours.
c. Location- opposite Sarala Birla public School, City in the Ara, about 10 kilometres
from Ranchi on the Ranchi-Purulia highway, in the Namkum block of Ranchi,
Jharkhand, India.

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III. Environmental Scanning
a. SWOT Analysis

b. Industry structure & competition

Strength
•ReasonablePrice
•WideVarietyof
coffe&drinks
•Classy&calm
Environment
•locatedonthe
roadnearschool
&college
•Affordableforall
agegroup
•wewillprovide
tasty&hygience
foodinaclean&
neatdiningroom
withwashing&
toiletfacility
Weaknesses
•Startupcost
•Newbusiness
•Nobrandimage
like our
competitors
•loanburden
•limitedcapital
funds
Opportunities
•Jobopportunities
forintellectualor
development
disabilitespeople
•Providesome
variety
•wewillprovide
reasonable
customer
satisfaction
Threats
•othercafelike
Starbucks,CCD,
Barista,
McDonalds&
otherlocalcafes
•highcompetition
Cafe Manager/Owner
Accountant Cook/Coffee Maker
Dishwashers
Head Waiter
Waiter/ress

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When engaging in business it important for a company to determine what they have to offer,
compared to what their competitors have to offer. An analysis can be conducted to determine
how environments and activities impact a business’ strategy. Several tools can be used to analyze
a company’s competitive environment, environments faced by the organization, and steps to take
to address limitations within the company’s business model.



1. Competitive Rivalry- there are 5 coffee shops within a 5-mile radius (including 1
Starbucks approximately 1.5 miles away) which creates increased rivalry among firms.
The market will grow, however, as the new hospital is built which will decrease rivalry
somewhat since there will be an increased customer base (provided that the market does
not get any more saturated with coffee shops). Brand identification with each specific
coffee shop allows for constrained rivalry. Additionally, there are low exit barriers
because of low asset specificity—it would be easy to sell off assets should we decide to
exit the market.
2. Threat of Substitutes-with tea, soda, energy drinks, and coffee grounds for home-
brewing so readily available, the threat of substitutes is high
Five
Forces
Model
Threat of
new
Entrants
Threat of
substitute
products
Bargainging
power of
buyer
Bargaining
power of
supplier
Rivalry
amoung
existing
competitors

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3. Buyer Power-there is high buyer power because there are many firms and many buyers,
and the switching costs, on average, are low because there are so many options to choose
from.
4. Supplier Power-there is low supplier power because of many competitive suppliers—the
product is standardized. Whether it is the coffee beans or the raw materials to make
Danishes and muffins, the ingredients are standardized at the point of purchase which
does not create dependency on any one supplier
5. Barriers to Entry-it are easy to enter into this market because there are no governmental
restrictions or proprietary know-how inhibiting others from entering. Furthermore, the
technology is common, easy to access, and relatively inexpensive, making entry to the
market fairly easy

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Competitor Analysis
Direct Competitor
CCD
Barista
Chai Sutta Bar
MBA Chai
Wala
Indirect
Competitor
Restaurants
Strategies
CCD has low
price &
maintain
quality
CCD has
outlets almost
every part of
the country
Tactics
Promotions by
providing
discount
coupons
online media
gift voucher

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IV. Business Strategy


a. Vision- To bring out people with diverse interest & Background together.
 To provide opportunities to the people with intellectual or developmental
disabilities
b. Mission- To be the best Café Chain by offering a world class coffee experience at
affordable.
c. Objectives - Ensure customer satisfaction and build a repeat-customer base
- Improve our position in the local market and strengthen our brand
- 10% discount will be applied to seniors to attract that market
- A person who is active in the community or social media influencer who
can promote the restaurant through his affiliation with many groups and
organizations.

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V. Marketing Plan

a. Target Market description- My target will be to anyone who enjoys coffee, but I will
mainly target people age 15 and older, both male and female and who are of working
class and students.

b. Segmentation strategy-



Demographic
•Age: 22-60 yrs
•Gender: Male & Female
•Occupation: Students, proffesionals & employees
•life-cycle stage: Single people, young married couples, old married
couples with children, youngest child under and over six.
Geographic
•Region: India
•Density: Urban
Psychrograhic
•Social Class: Middle & upper-class markets
•Lifestyle: Explorer, aspier, achiever
Behavioural
•Benefits sought: A place conducive for work, formal and informal
meerings; enjoying a premium quality coffee with relaxing home like
ambience.
•Degree of loyalty: 'hard core loyalty'

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c. 4 P’s Plan-

Product  Coffee – medium roast, Seasonal favorites & Flavored coffee
 Handcrafted beverages – fresh-brewed coffee , iced & hot
espresso drinks, Frappuccino coffee, non-coffee blended drinks,
& Tazo teas
 Fresh food items- pastries, salads, sandwiches, cakes,
oatmeal,& fruit cups
Price Affordable price for premium products
Place Location where students or working professionals customers
frequent
Promotion Advertising, word of mouth, public relations, personal selling &
social media marketing

d. Positioning, Differentiation & USP
USP:
 Exceptional coffee
 Personalized experience
 Vegan alternatives
 Delicious sweet treats
 Fast service
 Exciting loyalty scheme
 Reasonable pricing
 Atmosphere
 Eco-friendly/sustainable/ethical processes
 Charitable donations

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 Satisfaction guarantee



Differentiation
Product
Coffee, Tea & Snaks
Price
Starts with Rs50
Pople
People from all age
groups from teenagers
to youth even adults
Employment for
intellectual or
developmental
disabilities people

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VI. Technical or Operations Plan

a. Material requirement planning
We have negotiated an agreement with Robert Coffee Wholesalers to supply premium gourmet
Columbian coffee/espresso beans with two-day shipping. Milk, juices, soft drinks, fruit, etc. will
be sourced from the local Costco.
b. Machinery & equipment’s plan
 Espresso machine
 Coffee maker
 Coffee grinder
 Food service equipment (microwave, toasters, dishwasher, refrigerator, blender, etc.)
 Storage hardware (bins, utensil rack, shelves, food case)
 Counter area equipment (counter top, sink, ice machine, etc.)
 Serving area equipment (plates, glasses, flatware)
 Store equipment (cash register, security, ventilation, signage)
 Office equipment (PC, fax/printer, phone, furniture, file cabinets)
 Other miscellaneous expenses
c. Cost of manufacturing and running operations
 Utilities (water, electricity, gas, internet, phone) are estimated to be Rs8000 per month
 The building owner is responsible for trash collection, recycling, pest control, and security
 Existing zoning for restaurant usage
 2,000 square feet of indoor space in a modern, well-maintained building in an excellent
location
 Approximately 500 square feet of outdoor patio space, with lockup racks for bicycles
 A four-year lease at Rs3500/month with a fifth year free

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VII. Financial Plan
a. Projected cash flows

The Star bean café house – Cash flow by Year


2015 2016 2017 202
Cash flow
Landscaping
services
Rs40,000 Rs42,000 Rs41,000 Rs43,000
Gardening
services
Rs20,000 Rs21,000 Rs23,500 Rs23,000
Window
Cleaning
Services
Rs15,000 Rs17,500 Rs18,000 Rs18,000
Total Cash
Inflow
Rs75,000 Rs80,500 Rs82,500 Rs84,000


Cash
Expenditure
Wages Rs37,000 Rs39,000 Rs40,000 Rs41,000
Capital costs
(Equipment
purchases)
Rs5,000 Rs1,000 Rs300 Rs500
Maintenance and
Repair
Rs2,400 Rs2,000 Rs2,900 Rs2,000
Advertising Rs500 Rs300 Rs300 Rs300
Insurance Rs1,500 Rs1,600 RS1,600 RS1,700

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Total Cash
Expenditures
Rs46,400 Rs43,900 Rs45,100 45,500
Net Cash Flow Rs28,600 Rs36,600 Rs37,400 Rs38,500

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Landscaping- Cash Flow by Quarter 2021

Q1 Q2 Q3 Q4
Cash flow
Landscaping
services
Rs1,000 Rs19,000 Rs22,000 Rs7,000
Gardening
services
Rs500 Rs8,000 Rs8,500 Rs1,500
Window
Cleaning
Services
Rs0 Rs8,500 Rs11,000 Rs1,000
Total Cash
Inflow
Rs1,500 Rs35,500 Rs41,500 Rs9,500

Cash
Expenditure
Wages Rs700 Rs17,000 Rs18,000 Rs4,000
Capital costs
(Equipment
purchases)
Rs0 Rs1,000 Rs300 Rs500
Maintenance and
Repair
Rs1,000 Rs500 Rs200 Rs500
Advertising Rs300 Rs100 Rs0 Rs0
Insurance Rs0 Rs0 Rs0 Rs0
Total Cash
Expenditures
Rs2,000 Rs18,600 Rs18,500 Rs5,000
Net Cash Flow -Rs500 Rs16,900 Rs23,000 Rs4,500

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b. Projected income statement
Profit and Loss Statement
Period: Q4
Costs/Expense
Rent/lease 6,700
Service on debts 18,200
Payrolls 28,000
Taxes and Fees 24,000
Food costs 32,000
Utilities 7,800
Other expenses -

Total Cost 1,16,700

Income/Sales
Food Sales 2,55,000
Beverages Sales 87,000
Catering 19,000
Events 8,0000
Delivery Charges 2,300
Other income -

Total Sales 3,71,300

Profit/Loss 2,54,600

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c. Projected break-even point

A breakeven analysis allows you to apply various scenarios to your breakeven point and possibly
increase profits. Some reasons to calculate the analysis include:

Increasing the selling price: Staying with the example of Rs12 widgets, increasing the selling
price by Rs1 reduces the number of units you need to sell by 1,000 based on a new calculation:
Rs30, 000/ (\Rs13-Rs7)=5,000. However, increasing the selling price often is not an option in a
highly competitive environment.
Reducing your fixed costs: If you were able to reduce your fixed costs by Rs5, 000, you also
would reduce the breakeven point to 5,000 units sold. Reducing rent and payroll are common
ways for businesses to reduce fixed costs, as is relocating to other jurisdictions that have lower
business taxes or utility costs.
Reducing variable costs: Reducing variable costs by Rs1 also would lower the breakeven point
by 5,000 units. Variable costs typically are lowered by reducing material or labor costs. For
example, a builder could source lumber from a lower-cost supplier or take advantage of
equipment and/or technology to automate production.
Increasing sales: Assuming breakeven unit sales of 6,000, increasing the number of units sold to
10,000 would boost profits by Rs20, 000 (4,000 units at Rs5 per unit). This calculation can be
used when considering the benefits of advertising. Raising your advertising budget by Rs5, 000
per year would raise your fixed costs to Rs35, 000 and your breakeven point to 7,000. If such an
ad campaign raised your unit sales from 6,000 to more than 7,000, it would be considered
successful.

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Suppose that your fixed costs for producing 30,000 widgets are Rs30, 000 a year.

Your variable costs are Rs2.20 for materials, Rs4 for labor and Rs0.80 for overhead for a total of
Rs7.

If you choose a selling price of Rs$30,000/ (Rs12-$7) =6,000 units.

This means that selling 6,000 widgets at Rs12 apiece covers your costs of Rs30, 000. Each unit
sold beyond 6,000 generates $5 worth of profit. A sample breakdown leading to this calculation
might look something like this:

Fixed Costs for 30,000 widgets (per year)
Business Lease Rs15,000
Property Taxes Rs5,000
Insurance Rs4,000
Utilities Rs3,000
Total Fixed Costs Rs30,000
Variable Costs (per unit produced)
Materials Rs175.39
Labor Rs318.88
Overhead Rs6,377.66
Total Variable Cost (Per Unit) Rs558.04
Breakeven
Selling Price Per Unit Rs956.65
Selling price – variable costs Rs398.60
#Units to sell/year to breakeven (Rs30,000 / Rs5.00) 6000
Profit Targets
#Units to sell/year to generate $10,000 profit 8000
#Units to sell/year to generate $50,000 profit 16000

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d. Projected Balance sheet

Assets Rs Liabilities Rs
Current Assets: Current Liabilities:
Cash on hand 3,000 Accounts Payable 4,500
Cash in the bank 21,000 Rent/lease 3,600
Inventory 6,350 Utilities 1,500
Prepaid expenses 2,200 Sales Tax 1,250
Accounts Receivable 1,500 Income Taxes 2,200
Total: 34,050 Payroll 14,000
Fixed Assets: Employee Medical
Insurance
3,550
Real Estate (land/Building) - Total: 30,600
Furnishings 5,000 Long Term Liabilities:
Kitchen Equipment 2,50,000 Long-term loans 30,5000
Other Assets 45,000 Other Long-Term -
Total: 3,00,000 Total: 305,600

Total Assets: 3,34,050 Total Liabilities: 335,600

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VIII. Human Resource Plan
a. Manpower requirements

A manpower requirement for cafe includes managers, front line employees, and
employees with special skill sets required for this project. The roles of each
member of our proposed team and how they will interact with each other will be
defined. Employees are the backbone of your coffee shop. Without them – you
wouldn’t have a business. Even the smallest of shops are difficult to run and
manage as a one-man team.
The tricky part is figuring out how much staff to hire. How many people do you
need to run your shop, and which roles will they fill? Your staff will likely expand
as you grow, but when you’re just getting started, you’ll probably need to hire:
 Baristas
 Manager
 Accountant
Depending on your budget, you may choose not to hire a manager or an
accountant and take care of these tasks yourself.
The number of staff needed in a coffee shop will depend on your operating hours
and how much traffic your shop receives. Mornings and evenings are typically the
busiest hours for coffee shops.
Unless you have a very small shop, you will likely need two baristas on each shift.
If your shop is open 12 hours a day, you may need to hire 4 baristas and one or
two part-time employees with flexible schedules to cover shifts if full-time
employees cannot work certain days.
Figuring out how many employees to hire will be a challenge, but pay attention to
your staff’s behavior for clues. If you have people standing around, you probably
over-hired. If your service is slow, you probably under-hired.

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b. Recruitment and selection
After the firm has attracted enough job applicants, employment specialist will begin the selection
process. The steps in the employees selection process is described below:
Step 1:- initial screening Step 2: - employment testing Step 3: - selection interview
Step 4:- background and reference check Step 5:- physical examination
Step 6: - decision to hire
Which duties and responsibilities will your coffee shop staff take on? Keep in mind that the list of
staff above is just a general guideline. You may have unique roles that you want employees to
fill. Maybe you want to hire a waitress to serve food to guests and clear tables, or maybe you
want to have someone greet customers as they walk through the door.
If you’re having trouble creating your list of staff, identify the roles you want to fill and list
accompanying positions.
Working off of the list from the previous section, here are the duties and responsibilities of basic
staff in a coffee shop.

Baristas
Baristas run the show – or at least they should be running the show. Their job is to brew the best-
tasting coffee. They’re in charge of making coffee drinks.
But their job goes beyond simply brewing a pot of coffee and handing it off to a customer.
Baristas also answer customer questions, and even continue their education to learn the latest
advancements in the industry. They know how the machines work, and they understand how to
brew coffee.
If you want a truly great barista – and to serve really great coffee – you can’t just hire anyone to
do the job. If you hire a teenager who could care less about coffee and is only looking for a part-
time summer job, you probably won’t be serving your customers the best coffee in town.
Along with brewing coffee and acting as a cashier, baristas may also be in charge of cleaning up
and keeping an eye on inventory.
If your goal is to serve a truly great cup of coffee, you should look for baristas with the following
qualities:

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 Knowledge about coffee
 Reliable and honest
 Excellent people skills
 A passion for serving
 Inventory management skills
 Excellent pouring skills
 Latte art aficionado
While all of these skills are important, personality is, arguably, the most important thing. Coffee-
making skills can be taught to anyone, but to provide a great customer experience, you need a
barista who is friendly and enthusiastic with great people skills.

Manager
Coffee shop managers run the day-to-day operations of a coffee shop. From staff training to
enforcing customer service standards, managing inventory and taking care of financial matters,
managers have a number of job duties.
Managers must:
 Keep track of inventory
 Ensure employees are keep up with their cleaning assignments
 Handle customer disputes
 Supervise employees
 Find replacements for employees who call out
 Be in charge of coffee shop staff shift planning
Finding someone with good managerial skills can be a challenge, but it’s worth the time and
effort to find a person who will reliably run your store and work with your best interests in mind.
Many coffee shop owners will take on this role when first launching their shop.

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Accountant
An accountant will take care of your books, taxes, payroll and other financial matters. Many
coffee shop owners also take on the role of accountant when first launching their business. Once
the business starts growing and financial matters become more complex, they hire an accountant.

c. Compensation

Salaries, as we know, are payments that you receive from your employers in exchange for your
services. However, they are not chosen randomly & there are a few factors that decide one’s
salary & other incentives he might receive.

• Company Goals & Philosophy: Every organization has its compensation philosophy –
how it wants to position itself in the market with reference to pay, the companies that it considers
its competitors, the talent that it considers critical and so on. For example, if their competitor pays
10K salary to a networking guy, the company in question might pay him 10K,8K or
12K,depending upon how & what they think of the job role & the availability of the talent in the
market. The higher the availability, the lower are the chances of getting a good package.
• Experience and Education: Although this may not be explicitly stated, the number of
years of experience and education that you have under your belt, can & often has an influence on
your salary. While its says, the more the better, however, these could also make you overqualified
for a job, which can give rise to other sets of problems.
• Performance: “Pay for performance” is probably the most commonly heard term, when
salary is discussed. If you are an good/better/excellent performer,

Your increment will take that into consideration and get you closer to the higher end of the range,
while a low performer may not see any increment & might even be on the verge of losing one’s
job. Similarly, if the company is doing well and has a profit sharing model, employees may reap
benefits from the company’s performance.

• Cost of Living: Different locations have different costs & item prices. And as such, the
amount needed to survive in those locations also varies. For example, Pune , Bangalore ,Noida
etc. are some of the most expensive cities to live in INDIA Hence, the salaries paid by the
companies at those locations is adjusted to the local cost of living & is generally on the higher

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side. On the other hand, Jaipur, Amritsar is some of the most affordable places to live in the same
country. So, you can guess, your salary will also be on the lower side when compared to the
expensive ones. It has nothing to do with your experience or labor or your certifications or
achievements

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Bibliography


1. Search Engine:
www.google.com

2. Website:
 www.thebalancesmb.com
 www.businessplantemplate.com
 www.nhsbdc.org
 www.slideshare.net
 www.dreamalatte.com
 mcdonaldpaper.com
 www.posist.com