1

F

International

Business Plan

Event

Skyline DECA

Skyline High School 1122 228th Avenue Southeast

Sammamish, WA, 98075

January 2018

Thomas Cole, Maleka Darvish, Natalia Villamil

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TABLE OF CONTENTS

I.EXCECUTIVE SUMMARY ...................................................................................................................................... 1

II.ANALYSIS OF THE INTERNATIONAL BUSINESS SITUATION ...................................................................... 4

III. PROBLEM .............................................................................................................................................................. 8

IV. CUSTOMER SEGMENTS ..................................................................................................................................... 9

V. UNIQUE VALUE PROPOSITION ........................................................................................................................ 10

VI. SOLUTION ........................................................................................................................................................... 11

VII. CHANNELS ........................................................................................................................................................ 12

VIII. REVENUE STREAMS ...................................................................................................................................... 13

IX. COST STRUCTURE ............................................................................................................................................ 16

X.DETAILED FINANCIALS ..................................................................................................................................... 20

XI. KEY METRICS .................................................................................................................................................... 22

XII. COMPETITIVE ADVANTAGE ......................................................................................................................... 24

XIII.CONCLUSION ................................................................................................................................................... 25

XIV. BIBILIOGRAPHY ............................................................................................................................................. 26

XV. APPENDIX.......................................................................................................................................................... 27

1

I.EXCECUTIVE SUMMARY

Business Description:

Khila India will be the first subsidiary company of Feeding America, with the goal to combat

extreme malnourishment and poverty. Khila (KEY-LA) means feeding in Hindi-the official

language of the targeted state; Jharkhand- and symbolizes the mission to feed the hungry one person

at a time. During the first three years of investment, the Jharkhand communities of Khunti and

Gumia will be targeted, due to their high poverty and hunger rates. The following graphic illustrates

the basic process that Khila India will take to work towards ending hunger in India.

FARMS DISTRIBUTION CENTER FOOD TRUCKS COMMUNTIES

Opportunity for Investment: India is the ideal country of investment for Khila India due the three

opportunities, as depicted in the table below.

Opportunity Relevance

28.5% of Indians live in poverty. Khila India will deliver food to targeted areas of

poverty in India through our food trucks.

Land in rural India is abundant and inexpensive. Khila India can affordably acquire a distribution

center and farm.

70% of Indians have limited access to quality food. There is a large need for Khila India to provide

Indians with quality food.

Problem/Solution: India is facing multiple problems that could be solved through Feeding America’s

international expansion to India, as displayed in the graphic below.

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F E E D

Target Market: The food distributed to the rural communities in Jharkhand will have the following primary

and secondary markets:

Channels of Distribution: Khila India will use the following distribution methods to gather and deliver the

food packages to our primary and secondary markets. Our three-step process is explained below.

Unique Value Proposition: Adding Khila India as a subsidiary will increase Feeding America’s brand and

inflows, as portrayed in the acronym FEED below.

Revenue Streams: Khila India will have a similar revenue model as Feeding America. Khila India’s revenue

will come

from

various contributors. These contributions will be used to fund the distribution center and our costs.

Food banks are on trucks to make it

accessible to rural communities

Ethical company feeding malnourished children and families

healthy and inexpensive food

Eco-friendly resources in the distribution

center and for food trucks

Donations and contributions are large,

increasing Feeding America's retained earnings as a whole

Markets

Primary: Families in the villages of Khunti and

Gumia.

Secondary: Schools and institutions in the villages

of Khunti and Gumia

Co

llec

t U

nw

an

ted

P

rod

uce

fro

m

Fa

rmer

s Khila India will connect with local farmers to utilize their excess produce. Since this produce would otherwise go to waste, we are reducing the farmers' cost of disposal and gaining high quality/inexpensive produce. D

istr

ibu

tio

n C

ente

r

The collected produce will be delivered to our energy-sustainable distribution center. At this location, the produce will be cleaned, prepped, cooked and packaged. This distribution center will run on natural resources to lower expenditures and increase productivity.

Fo

od

Tru

ck

Del

iver

y t

o R

ura

l C

om

mu

nit

ies Our electric food trucks will

deliver the cooked food and grocery packages to the targetted communities. We will engage with a multitude of communities each week building relationships with the families and addressing their malnourishment.

3

At the end of the three fiscal years the available balance will be invested into new distribution centers, to maximize the reach of

Khila India’s efforts. The balance will also be available to begin purchasing crops from farmers in the event that their surpluses

decrease due to changing demand and supply in the economy.

As Khila India will be a subsidiary of Feeding America, an investment of $785,000 is requested to finance the international

expansion of the company into India. The projected income, cashflow, balance sheet, and return on investment for the first three

years of operations are shown below.

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

$20,000,000

Jan

18

Ma

r

Ma

y

Jul

Se

p

Nov

Jan

Ma

r

Ma

y

Jul

Se

p

Nov

Jan

Ma

r

Ma

y

Jul

Se

p

Nov

2018 - 2020

Cash Flow

2018 2019 2020

Operating Revenue 5,755,830$ 10,296,000$ 13,776,000$

Operating Expenses 2,427,161$ 2,586,519$ 2,726,730$

Income/ Loss before tax 3,328,669$ 7,709,481$ 11,049,270$

Tax Expense 665,734$ 1,541,896$ 2,209,854$

Net Income [Loss] 2,662,935$ 6,167,585$ 8,839,416$

46% 60% 64%

Forcasted Statement of Income

For the years ended December 31, 2018, 2019 & 2020

Khila India

2018 2019 2020

Beginning Cash Balance -$ 2,856,684$ 9,051,173$

Cash Inflows:

Allocative Unstricted Funding 785,000$ -$ -$

Contributions on Credit 1,398,345$ 2,574,000$ 3,444,000$

Contributions on Cash/Debit 4,357,486$ 7,722,000$ 10,332,000$

Total Cash Inflows 6,540,831$ 10,296,000$ 13,776,000$

Cash Outflows:

Fixed assets 618,155$ -$ -$

Payroll and related 1,733,141$ 1,785,135$ 1,838,689$

Customer acquisition 34,800$ 35,844$ 36,919$

Other 1,298,050$ 2,280,532$ 3,034,072$

Total Cash Outflows 3,684,146$ 4,101,511$ 4,909,680$

Net Cash Flow 2,856,684$ 6,194,489$ 8,866,320$

Ending Balance 2,856,684$ 9,051,173$ 17,917,493$

Khila India

Forecaseted Statement of Cash Flows

For the years ended December 31, 2018, 2019 & 2020

Assets Liabilities

Current Assets: Current Liabilities:

Cash 2,065,809 Accounts payable 13,416

Accounts Receivable 790,875 Other Current Liabilities 45,382

Other Current Assets 58,801 Total Current Liabilities 58,798

Total Current Assets 2,915,485

Net Assets

Fixed Assets 618,155 Unrestricted 785,000

Less: Accumulated Depreciation (26,907) Total Net Assets 785,000

Net Fixed Assets 591,248

Total Liabilities and Net Assets 843,798

Equity

Total Assets 3,506,733$ Retained Earnings 2,662,935

Total Equity 2,662,935

Total Liabilities and Equity 3,506,733$

As of 12/31/2018

Balance Sheet (Statement of Financial Position)

Khila India

Return On Investment

ROI = 𝐺𝑎𝑖𝑛 𝑓𝑟𝑜𝑚 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 − 𝐶𝑜𝑠𝑡 𝑜𝑓 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡

𝐶𝑜𝑠𝑡 𝑜𝑓 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 x 100%

Year Cost of

Investment

Gain with Khila

India

Implementation

Return On Investment (%)

2018 $785,000 $3,046,344 298%

2019 $785,000 $6,562,496 736%

2020 $785,000 $9,246,174 1,078%

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II.ANALYSIS OF THE INTERNATIONAL BUSINESS SITUATION

A. Economic, political and legal analysis of the trading company

1. Describe the trading country’s economic system, economic information important to your proposed

business/product/service, the level of foreign investment in that country

India’s Economic System:

India’s economy is mixed and has several characteristics of a market economy. India tries to change the structure of the

capitalist economy to make it more appropriate for model economy situations. The productive activities in India are divided between

the government (public sector) and the people (private sector). Some examples of industries

that are placed in the public sector include: the basic industries, the capital good industries

and the heavy industries. The light industries and consumer goods industries are placed in the

private sector. In India, almost the entire agricultural sector is under private ownership. 1

This means that Khila India will be able to partner with local, private farms to collect

unwanted food.

India’s Economic Information:

India’s gross domestic product is at 2.264 trillion USD and is exponentially rising. It

is one of the fastest growing economies in the world, despite having the two extremes of

poverty and wealth. Due to the positive, exponential trend of India’s GDP, it is safe to invest

in the country, especially as a non-profit organization. As India’s economy is driven by

agriculture, such stability will provide abundant resources (crops, food) for us to distribute to

those in need.

Additional Economic information:

Despite India’s fast-growing economy, many Indians are living in extreme poverty.

With extremely high poverty rates and number of families in rural areas, there is large demand

and opportunity for a company like Khila India to provide food and nutrition in these

communities. The graphic on the right (India Poverty Profile) displays India’s poverty profile

with some important statistics, driving the expansion.

As Feeding America is investing in an international venture, there is risk involved due

to fluctuations in the economy, more specifically in how the value of currency affects foreign

1 http://incredible-india-cayla.weebly.com/economic-system.html

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trade. If the value of the rupee (Indian currency) goes down, the perceived

financial return of the company in the US will increase, enriching the

value of the investment and vise versa. The unpredictability of Indian

currency is shown on the graph to the right as there are frequent

fluctuations in the value of the rupee. Currently the rupee is valued at

0.016 USD, making it less expensive to start the business venture in India.

2. Describe the trading country’s governmental structure and stability, how the government controls trade and private

business

Governmental Structure of India:

India gained independence in 1947. India’s constitution came into effect in 1950 and promotes the country as “sovereign,

socialist, secular, democratic, republic.” In addition, the Indian Constitution provides three separate entities (similar to the U.S.) for

carrying out the functioning of government: executive, judiciary, and legislative.

The titular head of the executive branch is the president, who is the Head of State

and exercises his authority through his cabinet, which consists of a group of ministers

headed by the Prime Minister. The legislature’s duty is to make policies for the country.

The Parliament consists of two houses: Lok Sabha (“House of People) or the lower house,

and Rajya Sabha (“Council of States”), which is the upper house. The judiciary in India is

unified and divided into three tiers with the Supreme Court at its apex, followed by 21 High

Courts in the states and Lower courts at district levels.2

Governmental Control on Trade and Private Business:

Under the Indian Constitution, the Indian government protects private ownership. The Indian Law establishes clear rights to

private ownership; foreign firms receive the same legal treatment as Indian companies, including government protection of private

sectors. Moreover, the Indian government does not discriminate against private businesses. We can benefit from such freedoms.3

2. Describe laws and/or governmental agencies that affect that affect your business/product/service [i.e., labor laws, trade laws

(U.S.A. and/or Canada and foreign)]

Indian Laws and/or Governmental Agencies:

The latest national agricultural policy of India was announced on 28 July 2000. Its core goal includes equitable inclusive

growth and sustainability in terms of efficient use of resources. The policy incorporates scientific and technological advancement in its

2 http://www.discoveredindia.com/india-at-a-glance/government.htm 3 http://www.state.gov/e/eb/rls/othr/ics/2015/241747.htm

Indian Government

Structure

Executive

LegislativeJudiciary

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objectives in order to compete globally. Also, it encourages the use of biotechnology for evolving plants that consume less water, are

drought and pest resistant, containing more nutrition, give higher yields and are environmentally safe. Furthermore, it promotes

technology for environmental protection through research undertaken by the government as well as research that are proprietary in

nature. The policy also emphasizes the conservation of bio resources through their ex-situ preservation in Gene Banks and in-situ

preservation in their natural habitat through biodiversity parks and so on. Biomass, organic and inorganic fertilizers, pesticides and

pest management are also promoted. The policy stipulates that the application of frontier sciences should be encouraged.

B. Trade area and cultural analysis

1. Geographic and demographic information, important customs and traditions, other pertinent cultural information,

competitive advantages and disadvantages of the proposed product and/or service

Geographic and Demographic Information:

India is a third world country located South of China and the Middle East. It

measures 1.2 million square feet, equivalent to twice the size of Alaska. The map on

the right displays two thirds of India is surrounded by water, more specifically the

Bay of Bengal and the Arabian Sea.4 India has three main geographic regions: 1) the

mountainous Himalayan region in the northern part of the country, 2) the Indo-

Gangetic Plain (where most of India's large-scale agriculture takes place), and 3) the

plateau region in the southern and central portions of the country.5 There are also

three large river deltas found on the Ganges, Brahmaputra, and Indus Rivers. All these

bodies of water facilitate agriculture by creating fertile land. The presence of a diverse

range of geographical structures in India causes a divide between different regions within the country. This makes it difficult for people

to travel to get food especially if they are of low income or in rural areas. However, this geographic layout is ideal for Khila India as it

provides the opportunity to bring relief to those who do not normally have access due to geographic constraints.

Important Customs/Traditions and Cultural Information:

Indian culture is full of rich customs and traditions. Throughout the year they observe holidays with extravagant festivals and

celebrations. One major holiday is Diwali, a five-day festival known as the festival of lights. The lights lit during the celebration

symbolize the inner light that protects them from spiritual darkness.6 Another important holiday is Holi (shown by the picture on the top

right), it celebrates love with a festival of color7.

4 https://tse1.mm.bing.net/th?id=OIP.vrcMzjIsG_W0unexkCqwugEREs&pid=15.1 5 https://www.thoughtco.com/geography-and-history-of-india-1435046 6 https://www.livescience.com/28634-indian-culture.html 7 https://tse2.mm.bing.net/th?id=OIP.SfESN3tVsUSmOpsR5Z-V9QEsCx&w=281&h=165&c

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Competitive Advantages and Disadvantages:

After a careful review of the data and analysis previously explained, Khila India has identified a competitive advantage and a

competitive disadvantage, displayed in the following table.

Competitive Advantage Competitive Disadvantages

-Large amount of food in India goes to waste, creating an opportunity

for this food to be redistributed to the hungry

-Millions of people live under the poverty line; therefore, there is a

large market for the services that Khila India provides

-A large portion of the Indian population is in need of aid, and it will be

difficult to focus on a specific area/community

-Due to the conditions of poor sanitation, it will be difficult to maintain

proper health standards throughout our food distribution

Market Segment Analysis:

Khila India will cater to its primary target market: families and children in rural areas of Kjunti and Gumia in the state of

Jharkhand. This state is the poorest state in India, therefore has the most need. In addition, the state is located far from the large cities

and is near the water; therefore, the people of Jharkhand have little

access to food and water. Our secondary market encompasses schools

and institutions in Jharkhand, India. Khila India has chosen this as a

secondary market because this is a place where children seek refuge and

deserve to be fed nutritious food. The following pie chart illustrates the

percentage of the India that is in urban versus rural areas as of 20168.

From careful analysis of this chart, it can be concluded that the rural

areas have potential to grow more and more. This means that the need

for our service from our target market is growing even more. Some

additional psychographic information about the rural area families in

India is provided in the table above the chart.

2.Analysis of the potential location—importance and requirements of each trade document required by the U.S.A. and/or

Canada and the country of choice

Since Khila India is not trading goods with India; trading documents are not necessary for our company. However, we must

register Khila India as a private business in India as well as in the United States.

8 http://www.npr.org/sections/thetwo-way/2015/12/09/459087477/the-tipping-point-most-americans-no-longer-are-middle-class

Target Market’s Desires How Khila India Fulfills the

Desires

Clean food and water with

sanitation

By providing clean food and

water that goes through food

safety laws in the distribution center

Easy access to food and water

Food will be delivered to families and children in rural

communities using food trucks

Nutritious meals for families Meals will be packaged and

delivered that contain all the

food groups and are of the

highest quality.

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III. PROBLEM

Malnourishment of Indian children: One quarter of

malnourished people in the world live in India9. This totals to

India being home to 194.6 million people that starve each day.

This staggering number of people that starve each day is

equivalent to double the population of France.10 With the vision

to lessen the number of Indians that are malnourished, the efforts

of Khila India will be focused on helping children and families

in rural areas. Unfortunately, about three thousand children in

India die every day from a poor diet related illness.11 A high

level of death in India’s youth is particularly concerning since children are future of India. Providing children proper nutrition from an

early age is important to ensure that they will be apt to grow, learn and build a brighter future for India.

Lack of accessibility for food in rural areas: Even though India is experiencing a vast amount industrial and agricultural growth, not

all Indians are able to bask in its affluence. High levels of illiteracy, inadequate health care and extremely limited access to social

services are common among poor rural people.12 By delivering meals to rural communities, Khila India will be reaching people that

do not have access to standard transportation services that would allow them to access relief offered in urban areas. As rural areas tend

to be highly populated13, there is a higher demand for food with supply of resources. This suggests that the food available for

consumption is scarce in rural areas, which creates both a need for food relief and the opportunity for Khila India to provide aid.

Excessive food waste in India’s agricultural industry: India is a large supplier of agricultural goods; however, large supplies of

crops like wheat and rice are not reaching those who need it most. To our advantage, 21 million tons of wheat is wasted in India and

50% of all food across the world meets the same fate and never reaches the needy.14 While serving the hungry, Khila India capitalizes

on the opportunity to redistribute valuable agricultural goods that are currently going to waste. Crops often go to waste due to the lack

of cold-storage facilities and ill-equipped warehouses15, therefore Khila India-having proper storage space- will provide farmers with

an alternative to throwing food out—donating it to save lives.

9 http://www.bhookh.com/hunger_facts.php 10 https://www.wfp.org/stories/10-fact-about-food-and-nutrition-india 11 https://www.indiafoodbanking.org/hunger 12 http://www.ruralpovertyportal.org/web/rural-poverty-portal/country/home/tags/india 13 https://www.slideshare.net/socialcops/decoding-open-data-2011-indian-census 14 http://thecsrjournal.in/food-wastage-in-india-a-serious-concern/ 15 http://www.deccanherald.com/content/352942/india-wastes-rs-44000-cr.html

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Lack of Sanitation in rural communities: A large divide between rural and urban areas continues to grow. Cities including Mumbai,

New Delhi, and Kolkata have been experiencing large economic growth and development during the last few years. Meanwhile, rural

areas in India still lack basic sanitation in their food and water. It is estimated that 21 percent of communicable diseases in India are

linked to unsafe water and the lack of hygiene practices.16 A lack of sanitation indicates that the little food that inhabitants of these

rural areas have access to can carry disease and bacteria. Khila India will be providing citizens in this area with food that is healthy

but also free of contamination. It is not only health that is affected by poor sanitation, the economy of India as a whole is impacted due

to the fact that people must pay for visits to the doctor and may lose their jobs because of inability to go to work. Specifically, 73

million working days across the country are lost annually due to sicknesses17. Without working, families are unable to provide for

their children. With nutritious meals from Khila India, Indians living in rural areas will be more apt to work and benefit their

economy.

IV. CUSTOMER SEGMENTS

The state that we have chosen to invest in India is Jharkhand. The

poverty level in this state is at 36.96%18. Jharkhand’s social indicators such as

literacy, enrollment, infant mortality, and child nutrition are below India’s

average as a whole.19 Within this state, Khila India will invest in two districts:

Kjunti and Gumia, shown by the green stars in the map on the previous page.

Gumia and Khunti are the largest rural areas in Jharkhand and are suffering the

most from poverty; therefore, these districts will have the largest market and need

Khila India’s services. The orange star shows where our distribution center will

be located. The distribution center will be in an urban area, in the capital of India, Ranchi. This distribution center location is the optimal

because it is equidistant being about 30 miles away from both districts and the land is extremely inexpensive and abundant. The Ranchi

residents are also better off economically than those in Gumia and Khunti which provides the opportunity for them to volunteer with

Khila India. Since there is high risk when entering a foreign country, we will only target the areas of Khunti and Gumia for the first

three years of Khila India. More specifically in these two districts we have chosen two markets; families and schools. As shown on the

pie chart on the following page, 60% of our efforts will be geared towards our primary target market families in Khunti and Gumia and

30% towards schools in Khunti and

16 https://water.org/our-impact/india/ 17 http://www.ruralpovertyportal.org/web/rural-poverty-portal/country/home/tags/india 18 http://thecsrjournal.in/food-wastage-in-india-a-serious-concern/ 19 http://kanigas.com/10-poorest-states-in-india-3/

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Gumia. We chose families as our primary target market in this region, as households are the foundation of ending poverty. If children

and families do not receive the proper nutrition at home, they will not be able to

succeed in the work force, let alone conquer their poverty. Our secondary target

market is schools since when children attend school malnourished they are unable to

learn to their full potential, as they are distracted by their extreme hunger and the

thought of whether they will get anything to eat in the next few days. As a result,

catering to schools as will help with children take advantage of their education, which

will benefit overall society, as the journey to close the poverty gap starts with education.

V. UNIQUE VALUE PROPOSITION

Feeding America’s mission statement and Khila India’s vision statement are as follows:

Khila India’s goals are similar to those of Feeding America in the sense that they will be oriented towards reducing the

amount of people in the world that suffer from hunger and malnutrition. Khila India however, the focus will be on hungry families and

children in India. For children in India who are in desperate need of nutrition, Khila India is a non-profit organization that enables

children and their families to receive the proper nutrition in an accessible way. The graphic displayed below visually explains how

Khila India competes for donations against similar businesses targeting the same market. As a unique company, there are no other

businesses that offer the same innovative idea as us; therefore, the graphic below presents using the acronym FEED what makes Khila

India different from competitors and effective in its methods.

Mission Statement

Feed America’s hungry through a nationwide network of member food banks and engage our country in the fight to end

hunger.

Vision statement

Ending child hunger, one step at a time.

Secondary

Schools in

Khunti and

Gumia

Primary

Families

in Khunti

and Gumia

Customer Segments

11

VI. SOLUTION

In order to provide food to malnourished families in the communities of Kjunti and Gumia Khila India will be established.

Feeding America is currently an American non-profit who works towards ending hunger by using the strategies shown below.

To offshore their services into India a new branch of Feeding America will be created known as Khila India. Khila India’s

operations will be controlled from the distribution center located in Gumia, Jharkhand. The distribution center will package and

process food from local farms which will then be distributed to rural communities in Gumia and Khunti (refer to section VII for

details). The distribution center will feature a reception center to receive the collected food, a loading dock to load food into the trucks

for delivery, a farm where food will be grown as to have a sustainable food source on site, a food storage center, a kitchen to cook the

necessary food, and a processing center to package the food. The floor plan of the proposed site is on the bottom corner of the page.

The farm will be outdoors but with easy access to the distribution center. There will be employees who focus on the farm daily,

as well as a groundskeeper that will be there daily to track the health of the farm. Grown in the farm will be traditional Indian crops of

wheat, rice and millet as well as seasonal fruits and vegetables that include tomatoes, peppers, gourds, carrots, okra, turnips, and

cauliflower.20 From the farm, food that will be distributed later that day will be cooked in the kitchen while the rest will be stored in the

storage area. There will also be food coming into the reception center from local farms and Indian events. The reception center food will

be inspected to make sure that it is safe to consume, as the food will be discards from other farms or recent celebrations. It will then be

transferred to the storage area or kitchen like the food from the farm. In the processing center the food is sorted into individual packages

so that there is variety and wholesome meals for

families. Once the meals have been packaged, they

will be placed into boxes based on the community

they will be delivered to. From there the boxes will

be loaded into trucks in the distribution center to be

distributed to the communities in need.

20 www.thealternative.in/lifestyle/a-sowing-calendar-for-vegtables-and-fruits-north-and-south-india/

12

The system described in the previous paragraph will be successful due to

the reasons illustrated on the graphic to the right. Our solution to malnourishment

in India will incorporate sustainable and nutritious meals, as food will come from

our own farm in the distribution center as well as left over crops from local farms

and food from events. It will be healthy since as food goes through the Khila India

distribution center it will be checked against disease and contamination which is

something that can be found in the food that people in rural communities typically

have access to. The distribution center will be green, as it will operate from the

energy generated from solar panels instead of conventional electricity. Our meals

will be accessible, as food will be distributed directly to those who need it rather than of those who are malnourished having to seek out

transportation to reach relief themselves. Khila India will be resourceful too as we will obtain part of the produce from discards of

weddings and farms which is food that would otherwise accumulate in landfills. Lastly, Khila India will be valuable as it will provide a

service to the Indian community by providing food to those in need. And while services like these might be available in urban areas in

India, Khila India will be the first to offer the proper nutrition to Indians in rural areas who are in need.

VII. CHANNELS

Khila India will exploit three channels: a farm, a distribution center, and a food truck delivery system.

Khila India will follow the system on the graphic above to ensure food is delivered to families and children in each

community on a weekly basis. Khila India is set up for high efficiency and productivity by only having three channels of distribution.

These attributes—productivity and efficiency—will be the key to success for the business. To inform the communities when we will

be delivering, we will use the community bulletin boards. This operation system will ensure that Khila India will be of success to the

communities and reach our goal of working to end malnourishment.

Collect Unwanted

Produce from Farmers

• Khila India will connect with local farmers to utilize their excess produce. Since this produce would otherwise go to waste, we are reducing the farmers' cost of disposal and gaining high quality/inexpensive produce.

Distribution Center

• The collected produce will be delivered to our energy-sustainable distribution center. At this location, the produce will be cleaned, prepped, cooked and packaged. This distribution center will run on natural resources to lower expenditures and increase productivity.

Food Truck Delivery to

Rural Communities

• Our electric food trucks will deliver the cooked food and grocery packages to the targetted communities. We will engage with a multitude of communities each week building relationships with the families and addressing their malnourishment.

Khila India

Green

Resourceful

Healthy

Accessible

Sustainable

Valuable

13

VIII. REVENUE STREAMS

A. What is the revenue model?

Khila India’s revenue will be derived from different types of donations provided by both individuals and corporations. Donations

are one time or monthly payments to accommodate donator’s preferences.

*Note Khila India will not accept temporary or permanently restricted donations due to the restriction related to the donation

Kroger Donations are collected from Kroger stores in the US by donations that customers provide as they check out. The

effectiveness of Kroger Donations will be further explained on pg. 19. General Donations are provided by small public and private

companies and are a one-time payment of $25USD. Individual Members are people in India and other countries who contribute through

a $2USD monthly donation. Individual Premium Members provide $50USD every month and Corporate Members provide $200USD

every fiscal quarter both individual premium members and corporate members will receive special recognition from the organization.

All members will commit to a year of membership while paying monthly payments of their corresponding values based on the type of

membership. These prices can be justified as higher-class individuals in India earn an average of $120,000-$600,000 a year, which

gives them higher disposable income that can be used to support Khila India, and its vision. Additionally, with multiple forms of

donations individuals and corporations can choose the payment plan that accommodates their income the best. By contributing to Khila

India’s mission corporations will be able to practice their corporate social

responsibility which creates brand loyalty and a positive company image.

The positioning map on the right compares Khila India to its

competitors, as mentioned in Section V. Khila India has two main

competitors in India: Pardon India and India Food Banking Network. These

companies are working to end hunger in India through various methods,

including education of farmer and the establishment of food banks.

Revenue Stream Employment

25%

35%5%

15%

20%

Kroger

Donations

General

Donations

Individual

Members

Individual

Premium

Members

Corporate

Members

1.Kroger Donations

•One time 1USD donations at US Kroger Store checkout

1.General Donations

•One time payment of 25 USD by individuals/corporations

1.Individual Member Fees

•Monthly payments of 2USD by individuals

1.Individual Member

Premium Fees

•Monthly payments of 50USD by individuals

1.Corporate Member Fees

•Monthly payments of 200USD by large corporations

14

This positioning map places Khila India ranked higher than its competitors for both status and effectiveness. The status is

based off how well the donators are treated by each company and the recognition that they are given. The effectiveness is derived

from how successful the services are towards ending hunger. Pardon India is placed on the less effective side with low status because

it does not reach a wide variety of Indians when distributing food and does not give recognition to their sponsors. Also, India Food

Banking Network is somewhat effective because it has set up food banks throughout India, but the target market has little access to

them. India Food Banking Network, also, does not give much recognition to those who have donated. However, a limitation of this

positioning map is that there is bias when creating the map.

B. What is the life time value?

Not all of Khila India’s revenue streams contribute equally to the revenue. To quantify each revenue stream’s

contribution, the following table shows each stream’s life time value:

Lifetime Values

Cost of

Donation ($)

Times Donation

Occurs Per Year

Annual

Cost ($)

Years as

Contributor

Life Time Value

Per Contributor

Total number of

Contributors

Life Time Value

($)

Kroger Donator 1 2 2 5 10 5,990,000 50,990,000

General Donators 25 2 25 6 150 310 46,500

Individual Member 2 12 24 7 168 1,000 168,000

Individual Premium

Member

50 12 600 3 1,800 1,000 1,800,000

Corporate Member 200 12 24,000 3 72,000 1,400 100,800,000

The life time value of type of contributor was derived by multiplying the value of the

donation by the number of times the donation occurs in a year by the number of years the

contributor is expected to continue donating to Khila India. The total life time value was then

found by multiplying the contributor life time value by the total number of contributors of that

type for the total number of years. For details on the different types of contributors and donation

costs refer to previous section VIII A. For details on the number of contributors for each revenue

stream refer to the next section VIII C. As shown above the revenue stream with the largest life time value are corporate members, this

is due to the large annual contribution and the larger number of corporate members. The next largest life time value are individual

donors, even though their donation is the smallest due to the massive number of contributors in this stream they add to the company’s

life time value. Next are individual premium members, similarly to the corporate members their large annual contribution and contributor

number totals up to a significant life time value. Next would be individual members which even though they have the same number of

contributors as the premium members they provide a smaller annual donation which results in a smaller life time value. This disparity

in contribution between premium and normal members justifies premium members receiving additional benefits like being recognized

by Khila India. The smallest life time value is produced by the general donors as their donation only occurs once a year. The graph on

previous page (life time value percents) corner shows what percentage of the total life time value is provided by each revenue stream.

15

C. What is the revenue?

As a non-profit organization, Khila India will collect its revenue from various donations. There will be five revenue streams,

each having different forecasted donations as well as set donation values. Since we will not be making “sales”, our revenue will be

based off donations. The large number of donations received from Kosher Donations can be further explained in the next section: D.

What is the gross margin. The rest of the contributors will be obtained with the help of Feeding America, as Khila India will advertise

to those who already contribute to Feeding America, so that they can contribute to this new venture.

The chart below depicts Khila India’s donation forecast for the first three years of operations.

Our revenue model depicts that our total revenue will increase each year, as we are expecting to gain more contributors to our

organization over time. For the first year of operations, our expected revenue will be $5,755,830. By the end of the second year, we

expect $10,296,000 of inflows. Our third year of operations is forecasted to have $13,776,000 worth of revenue. Although these

inflows may seem high, it is proportionate to Feeding America’s revenue (see Appendix for Feeding America’s financials), as we are a

subsidiary of their organization.

D. What is the gross margin?

Average

Sales

Conservative Likely Aggressive Price Conservative Likely Aggressive

2,400,000 3,700,000 4,400,000 $1 2,400,000$ 3,700,000$ 4,400,000$

200 310 450 $25 6,800$ 7,750$ 8,250$

750 1,000 1,250 $2 6,000$ 7,580$ 8,250$

750 1,000 1,250 $50 375,000$ 435,500$ 500,000$

1,000 1,400 1,800 $200 1,450,000$ 1,605,000$ 1,850,000$

4,237,800$ 5,755,830$ 6,766,500$

Revenue Model

For the Year 2018

Corperate Donation (one time)

Total

Units Sold Budgeted Revenue

Revenue Stream

Individual Contribution

Individual Member Fees (Monthly)

Individual Member Fees Premium (Monthly)

Corperate Member Fees (Monthly)

Three Year Donations Forecast Khila India Fiscal Year Begins Jan-18

Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18

Annual

Totals 2019 2020

Kosher Donations 120,000 200,000 200,000 250,000 250,000 470,000 120,000 220,000 350,000 350,000 450,000 720,000 3,700,000 4,440,000 5,772,000

Sale price @ unit 1 1 1 1 1 1 1 1 1 1 1 1 1 1

Cat 1 TOTAL 120,000 200,000 200,000 250,000 250,000 470,000 120,000 220,000 350,000 350,000 450,000 720,000 3,700,000 4,440,000 5,772,000

Corperate Donations (One Time) 10 10 10 15 10 50 15 15 15 20 40 100 310 400 500

Sale price @ unit 25 25 25 25 25 25 25 25 25 25 25 25 300 300

Cat 2 TOTAL 250 250 250 375 250 1,250 375 375 375 500 1,000 2,500 7,750 120,000 150,000

Individual Member Fees (Monthly) 100 120 130 130 150 230 230 250 300 400 750 1,000 1,000 1,500 2,250

Sale price @ unit 2 2 2 2 2 2 2 2 2 2 2 2 24 24

Cat 3 TOTAL 200 240 260 260 300 460 460 500 600 800 1,500 2,000 7,580 36,000 54,000

Individual Member Fees Premium (Monthly) 500 550 570 570 600 770 780 800 820 850 900 1,000 1,000 2,500 4,000

Sale price @ unit 50 50 50 50 50 50 50 50 50 50 50 50 600 600

Cat 4 TOTAL 25,000 27,500 28,500 28,500 30,000 38,500 39,000 40,000 41,000 42,500 45,000 50,000 435,500 1,500,000 2,400,000

Corperate Member Fees (Monthly) 75 150 200 300 400 750 800 900 950 1,000 1,100 1,400 1,400 1,750 2,250

Sale price @ unit 200 200 200 200 200 200 200 200 200 200 200 200 2,400 2,400

Cat 5 TOTAL 15,000 30,000 40,000 60,000 80,000 150,000 160,000 180,000 190,000 200,000 220,000 280,000 1,605,000 4,200,000 5,400,000

Monthly totals: All Categories 160,450 257,990 269,010 339,135 360,550 660,210 319,835 440,875 581,975 593,800 717,500 1,054,500 5,755,830 10,296,000 13,776,000

12-month Sales Forecast for 2018 Annual Sales Forecast

16

As shown on the previous page, the largest source of donations for Khila India will be Kroger Donations, due to the large quantity

of projected donators in the revenue stream. There are 2,700 Kroger stores in the US, however it is expected that only 7.5% of these

stores will participate due to the operational changes required to collect donations for Khila India. This reduces the number of

participating stores to 1,900 The average number of transactions that occur in an individual Kroger store daily are 2,500 however it is

likely that the conversion rate for donations will be 2% as most Kroger store customers will not want to donate. After taking the

conversion rate into account only 50 daily transactions will lead to a Kroger Donation. In the table below, the information generated

above is used to calculate the total number of contributions received from Kroger Stores annually.

Kroger Donation Contributor Calculations

Daily Number of Contributing

Transactions Per Store

Annual Contributing

Transactions Per Store

Number of Stores Total Number of Kroger

Donation Contributions

50 18,250 203 3,695,220

*Please note that for the purpose of making the financial statements clear the number of contributions will be rounded to 3,700,000.

IX. COST STRUCTURE

A. What are the customer acquisition costs?

Customer (donator) acquisition costs for Khila India will include the costs associated with obtaining and retaining contributors and

volunteers will be included. This is because both stakeholders are essential for the success and efficiency of the company. Overall

customer acquisition is an integral part of the business as without the support of others Khila India would not be able to operate. The

Gantt chart below illustrates the promotional activities scheduled for the year 2018.

Online ads will be posted on websites like Paytm, and google which are frequented by middle to upper class Indians who are the

ideal target for contributors21. Celebrity endorsements will be used throughout our advertisements to persuade people into donating to

Khila India. This idea of ethos will be further developed by the chosen celebrity posting on social media about the organization.

Magazine ads will be used in the popular Indian magazine India Today to attract individual contributors and the magazine Business

India to attract corporate contributors. Emails will be sent to major corporations in the area and individuals to increase the number of

21 https://www.alexa.com/topsites/countries/IN

17

contributors. Promotional items in the form of stickers with the Khila India logo will be distributed to

volunteers after they come help at the distribution center. These items will generate word of mouth promotion

and are relatively inexpensive. Emails will be sent to people living near the distribution center to alert them

about this volunteer opportunity. Organizations like local churches and schools will be notified via phone about

Khila India and its mission since these organizations often look for non-profits like Khila India to support in

their volunteer efforts. A website will be useful as it will provide information on how to donate, how to volunteer, and general

information about Khila India and its mission. A social media page will also be created to show what is being done to solve child hunger

in India. The total costs of the customer acquisition methods described above for both contributors and volunteers are shown in the table

below, the yearly cost will be $34,800, for promotional activities including website development and maintenance.

Customer Acquisition Costs

Method Associated Activities One Time Cost Frequency Total Cost

Online Advertisements Developing Ads, and

putting them on websites

$700 Bi-weekly $16,800

Celebrity Endorsements Paying them to post on

social media

$1,000 Monthly $12,000

Emails

Sending them to potential

individual/corporate

contributors and volunteers

$800 Bi-monthly $4,800

Promotional Items Stickers with logo to

distribute to volunteers

$100 (for 500units) Bi-monthly $600

Website Website maintenance $100 Bi-Monthly $600

Organizations

Phone calls to

organizations to promote

volunteering

$0 Weekly $0

Social Media

Creating and managing

Instagram and Facebook

page

0 Weekly $0

Total Customer Acquisition Costs $34,800

B. What are the distribution costs?

Below are three primary distribution costs that Khila India will incur. As mentioned in Section VII, we will have three

channels of distribution; therefore, we will have three costs of distribution.

Distribution Costs for Khila India

Activity Cost Description Monthly Cost 2017 Cost 3-Year Cost

Collect Unwanted

Produce From Farmers

Khila India will collect produce waste from local

farms

$30 electric $900 $2,700

Distribution Center The collected produce will be delivered to our

energy-sustainable distribution center.

$30 electric $900 $2,700

Food Truck to Rural

Communities

Our electric food trucks will deliver the cooked food

and grocery packages to the targeted communities

from the distribution center.

$500 electric $6,000 $18,000

Totals N/A $560 $7,800 $23,400

18

C. What are the human resource costs?

In order for Khila India to successfully feed hungry families and children throughout Jharkhand, India, we will need a multitude

of employees. This organization is quite complex and there are many working parts to it. The organizational chart below illustrates the

different components and employees involved in the running of the business.

As a subsidiary of Feeding America, Khila India will have numerous human resource personnel. Due to this, Khila India will

need a human resource manager to manage all of the departments and employees. We will have one financial officer who will take

account of all financial decisions and payments. As a new subsidiary, it we must keep a strict budget with our spending and keep a

close eye on our financials. The community outreach director will conduct marketing campaigns to connect with donators and the

affected communities. It is also essential to have a supply chain manager in order to keep the farm, trucks, and distribution center

operating properly. The farm manager will connect with local farms to collect food waste as well as manage the distribution center

farm. We will need farmers to harvest the crops in our distribution center. It is essential to have truck managers to map out the truck

driver’s routes, connect them with communities, and make sure the trucks are in proper condition. The distribution center manager is

needed to properly operate the center. They will oversee the cooks, who will cook the crops from the farm, the janitor, who will make

sure the distribution center meets food safety standards, and the food packagers, who will package the cooked food into meals to be

sent off to the rural communities. With these working pieces, Khila India can successfully feed families and children in rural areas of

Jharkhand. As Khila India grows and gains more revenue the number of employees and their salaries will adjust to fill new needs of

the business.

Feeding America Khila India

PresidentVP of Human

ResourcesVP of

Operations

Farm Manager

Farmer (x3)

Supply Chain Manager (x1)

Truck Manager (x3)

Truck Driver (x5)

Distribution Center

Manager (x2)

Distribution Center

Manager (x2)

Cook (x5)

Janitor (x2)

Food Packagers (x10)

Vp of FinanceCommunity

Outreach Director

Khila India- Organizational Structure

19

The table below shows the projected salaries and benefits of Khila India for the first year of operations.

Employees at Khila India will be obtained from local area of Jharkhand and will be joined by current Feeding America

employees that know the business model, and will serve as managers. The right section of the table shows the total compensation for

each of our employees, not including contractors. From this table, we can conclude how much we will be paying each of our

employees annually. Our annual payroll expense will cost us $1,343,520. The section on the left of the table displays the employer-

related taxes and the benefit rate for each employee. It shows the total salary burden for our employees on Khila India is $389,620.

Furthermore, the employees will pay 9% of their annual salary as an employment tax to the local and federal government. Lastly, each

employee will have an additional 21% for his or her benefits.

Position

Rate Per

Hour, Per

Employee

Average Hours

Per Month, Per

Employee (Hours)

Average Monthly

Payroll Expense Per

Employee ($)

Total Annual

Payroll Expense

Per Employee ($)

Cumulative

Payroll Tax

(%)

Cumulative

Benefit

Rate (%)

Total Salary

Burden ($)

President $50 170 $8,500 $102,000 9% 21% $29,580

VP of Finance $48 170 $8,160 $97,920 9% 21% $28,397

VP of Operations $46 170 $7,820 $93,840 9% 21% $27,214

VP of Human Resources $42 160 $6,720 $80,640 9% 21% $23,386

General Manager #1 $38 160 $6,080 $72,960 9% 21% $21,158

General Manager #2 $38 160 $6,080 $72,960 9% 21% $21,158

Distribution Center Manager #1 $34 160 $5,440 $65,280 9% 21% $18,931

Distribution Center Manager #2 $34 160 $5,440 $65,280 9% 21% $18,931

Community Outreach Director $30 160 $4,800 $57,600 9% 21% $16,704

Farm Manager $25 140 $3,500 $42,000 9% 21% $12,180

Farmer #1 $16 120 $1,920 $23,040 9% 21% $6,682

Farmer #2 $16 120 $1,920 $23,040 9% 21% $6,682

Farmer #3 $16 120 $1,920 $23,040 9% 21% $6,682

Truck Manager #1 $20 120 $2,400 $28,800 9% 21% $8,352

Truck Manager #2 $20 120 $2,400 $28,800 9% 21% $8,352

Truck Manager #3 $20 120 $2,400 $28,800 9% 21% $8,352

Truck Driver #1 $13 160 $2,080 $24,960 9% 21% $7,238

Truck Driver #2 $13 160 $2,080 $24,960 9% 21% $7,238

Truck Driver #3 $13 160 $2,080 $24,960 9% 21% $7,238

Truck Driver #4 $13 160 $2,080 $24,960 9% 21% $7,238

Truck Driver #5 $13 160 $2,080 $24,960 9% 21% $7,238

Cook #1 $20 120 $2,400 $28,800 9% 21% $8,352

Cook #2 $20 120 $2,400 $28,800 9% 21% $8,352

Cook #3 $20 120 $2,400 $28,800 9% 21% $8,352

Cook #4 $20 120 $2,400 $28,800 9% 21% $8,352

Cook #5 $20 120 $2,400 $28,800 9% 21% $8,352

Janitor #1 $13 160 $2,080 $24,960 9% 21% $7,238

Janitor #2 $13 160 $2,080 $24,960 9% 21% $7,238

Food Packager #1 $11 90 $990 $11,880 9% 21% $3,445

Food Packager #2 $11 90 $990 $11,880 9% 21% $3,445

Food Packager #3 $11 90 $990 $11,880 9% 21% $3,445

Food Packager #4 $11 90 $990 $11,880 9% 21% $3,445

Food Packager #5 $11 90 $990 $11,880 9% 21% $3,445

Food Packager #6 $11 90 $990 $11,880 9% 21% $3,445

Food Packager #7 $11 90 $990 $11,880 9% 21% $3,445

Food Packager #8 $11 90 $990 $11,880 9% 21% $3,445

Food Packager #9 $11 90 $990 $11,880 9% 21% $3,445

Food Packager #10 $11 90 $990 $11,880 9% 21% $3,445

Totals $794 4400 Hours $111,960 $1,343,520 NA NA $389,621

Projected Benefits Projected Salaries

20

D. Additional Costs?

As an organization with an operating distribution center, Khila India will have various fixed assets that will depreciate over

time. The following table displays the depreciation schedule for Khila India’s fixed assets. The depreciation was calculated using the

straight-line method. In this method, each asset depreciates in a linear fashion, as it has the same depreciation expense each year. The

formula used for the straight-line depreciation method is (cost of fixed asset – salvage value)/estimated useful life. The depreciation

schedule shows a $26,907 in annual fixed asset expenses after all the depreciation costs are calculated. The distribution center will be

green and eco-friendly; and will therefore have various additional fixed assets. Although the costs of these may be high, having a

green-company is attractive to our donators as it adds a socially responsible image to the company.

X.DETAILED FINANCIALS

A. Projected Income and Expenses

The forecasted three-year income statement is shown on page 21 and the cash flow statement is shown on page 22. Both financial

statements are formatted in coherence to Feeding America’s financial reports for 2017 to accurately model the finances of a non-profit

business model.

Number Date Cost Value Expense

1 1/4/2018 3,200$ 20 500$ 2,700$ 135$

2 1/4/2018 390$ 20 50$ 340$ 17$

3 1/4/2018 3,786$ 12 500$ 3,286$ 274$

4 1/6/2018 6,198$ 12 1,500$ 4,698$ 392$

5 1/6/2018 8,900$ 20 2,000$ 6,900$ 345$

6 1/6/2018 12,000$ 20 3,000$ 9,000$ 450$

7 1/6/2018 7,302$ 14 2,000$ 5,302$ 379$

8 1/6/2018 1,799$ 15 250$ 1,549$ 103$

9 12/28/2017 20,000$ 20 -$ 20,000$ 1,000$

63,575$ 53,775$ 3,094$

10 12/28/2017 10,000$ 10 2,000$ 8,000$ 800$

11 1/3/2018 360,000$ 30 40,000$ 320,000$ 10,667$

12 1/3/2018 12,080$ 12 2,000$ 10,080$ 840$

13 1/3/2018 22,500$ 30 5,000$ 17,500$ 583$

404,580$ 355,580$ 12,890$

14 1/3/2018 150,000$ 13 8,000$ 142,000$ 10,923$

150,000$ 142,000$ 10,923$

618,155$ 26,907$ Total Fixed Assets

Total Transportation

Furniture and Equipment

Furniture and Equipment

Furniture and Equipment

2x All Electric 2009 Medium Duty eStar Food TruckTransportation

Total Furniture and Equipment

Tesla Solar Panels

Air conditioner

4x Tesla Power Wall

Kitchen Equipment

Kitchen Equipment

AcquisitionFixed Asset

For the Period Beginning January 2018

Fixed Asset and Depreciation Schedule

Khila India

Salvage

Value

Annual Straight Line

Depreciation

Class Description

Life in

Years

2x Commercial, All Electric Range Boiler Top

Commercial, All elctric Double Deck Convection

All Electric 7 ft Grease Hood

Kitchen Cabinets

Tables and Chairs

Total Kitchen Equipment

Kitchen Equipment

Commercial Walk in Freezer by AmeriKooler

Stainless Steel Commercial 3in1 sink

CMA Commerical Dishwasher

2x Commerical Fridgerator

Commercial, All Electric, 10 Burner Range with two

Kitchen Equipment

Kitchen Equipment

Kitchen Equipment

Kitchen Equipment

Kitchen Equipment

Kitchen Equipment

Furniture and Equipment

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300

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100

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38,5

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ly)

15,0

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160,0

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21%

33%

36%

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30%

44%

52%

52%

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22

The following table shows the forecasted balance sheet for the first year of operations.

The bottom table depicts the return on investment for the years 2018-2020 showing why Khila India has the potential to positively

contribute to Feeding America’s financial return.

B. Proposed Plan to Meet Capital Needs

As Khila India will be an extension of Feeding America, a loan will not be required as funds will be provided in the form of allocative

unrestricted funding from Feeding America. Because of this Khila India’s retained earnings will be added to those of Feeding America

at the end of the trading period. Feeding America’s detailed financial statements can be found in the appendix for reference.

XI. KEY METRICS

To ensure Khila India reaches the key benchmarks, a series of metrics evaluating our financial and operating positions are

shown on the following page. The key metrics listed above assist Khila India in determining the growth, profitability, and ability to

sustain operations. Through continuous evaluation and improvements of key metrics, Khila India will become an increasingly more

successful subsidiary of Feeding America.

Assets Liabilities

Current Assets: Current Liabilities:

Cash 2,065,809 Accounts payable 13,416

Accounts Receivable 790,875 Other Current Liabilities 45,382

Other Current Assets 58,801 Total Current Liabilities 58,798

Total Current Assets 2,915,485

Net Assets

Fixed Assets 618,155 Unrestricted 785,000

Less: Accumulated Depreciation (26,907) Total Net Assets 785,000

Net Fixed Assets 591,248

Total Liabilities and Net Assets 843,798

Equity

Total Assets 3,506,733$ Retained Earnings 2,662,935

Total Equity 2,662,935

Total Liabilities and Equity 3,506,733$

As of 12/31/2018

Balance Sheet (Statement of Financial Position)

Khila India

23

Khila India – Financial Metrics

Metrics Purpose Calculation Benchmark How to Improve

Profitability (Income Statement):

Revenue Monitor market acceptance

and share

Contribution (See Section

XIII)

2018: $5,755,830

2019: $10,296,000

2020: $13,776,000

Evaluate revenue streams by customer

segment to establish strategies

Gross Profit

Margin (%)

Measures profit from product

sales and ability to cover

operating expenses

(Revenue – Cost of

Goods Sold) / Revenue

N/A Increase sales price

Increase quantity sold

Decrease operating expenses

Net Profit Measures overall

performance including

operating expenses

Gross Profit – Expenses –

Interest – Taxes –

Dividends

N/A Same as gross profit strategies above

Decrease operating expenses

Manage taxes and interest expenses

Efficiency (Balance Sheet):

Return On

Capital

Employed

Measures efficiency of

capital invested

Net Profit / (Lifetime

debt + Equity)

N/A Improve profitability

Pay off debt

Days A/R

Outstanding

Measures time that A/R is

paid

(A/R) / Credit Sales) X

365 Days

< 30 Days Shorten timeframe for customers to pay

back

Days A/P

Outstanding

Measures time that A/P is

paid

Revenue / Number of

Employees

> 30 Days Increase timeframe to payback suppliers

Liquidity:

Working

Capital Ratio

Reveals ability to use liquid

assets to cover short-term

debts

Current Assets / Current

Liabilities

2:1 Invest liquid assets into business

Raise value of current assets

Reduce value of current liabilities

Acid Ratio Measures ability to use quick

assets to pay current

liabilities immediately

(Current Assets – Stock) /

Current Liabilities

1:1 Decrease amount of cash or A/R

Decrease amount of short-term loans or

A/P

Net Cash Flow Cash inflows and outflows

difference

Cash Inflows – Cash

Outflows

2018: $12,679,658

2019: $9,051,173

2020: $17,919,493

Increase revenue

Decrease expenses/costs

Khila India – Operating Metrics

Metrics Purpose Calculation Benchmark How to Improve

Customer:

Lifetime Value Evaluate profitability of a

customer

Average value of

contribution) X (Average

Retention Time)

Kroger Donator:

$10,198,000

General Donator:

$7,750

Individual Member:

$24,000

Individual Premium

Member:

$600,000

Corporate Member:

$33,600,000

Adjust promotion strategies

Customer

Acquisition

Cost

Determine how much

promotional investment is

made to obtain contributors

See Section IX A Must be lower than

lifetime value

Adjust promotion strategies based on

customer segments

Customer

Satisfaction

Score

Reveals contributors

satisfaction with donating to

organization

N/A > 90% Make improvement’s based on

customer feedback and competitor’s strategies

Employees:

Staff Turnover Evaluate employee

engagement strategies

N/A N/A Training, recognition, teamwork, etc.

Employee

Satisfaction

Score

Reveals employees’

satisfaction with working

conditions and make

alterations based on

employee feedback

N/A > 90% Critically evaluate for prioritizing

Keep wellbeing of employees in mind

when decision making

Staff Cost

Ratio

Measures cost of Payroll staff

relative to revenue; determine

how many employees to hire

(Payroll + Payroll Tax) /

Sales

2018: 0.3: 1

2019: 0.2: 1

2020: 0.1: 1

Reduce employee

salaries/wages/benefits

Reduce budget expenses

24

XII. COMPETITIVE ADVANTAGE

Khila India strives to supply food to families in India who cannot easily access food by delivering it on food trucks to

different communities. Funds will be obtained the through connecting with Kroger stores throughout the world and reaching out to the

higher income individuals and companies in India. There is a lack of companies that present similar business plans as they lack the

delivery of resources to the communities themselves; therefore, Khila India’s competitive position is clearly defined. Nevertheless, the

table below illustrates Khila India’s competitive advantages and disadvantages in relation to Khila India’s competitors.

Competitor Competitor’s

Product/Service

Offered

Competitor’s

Advantage

Competitor’s

Disadvantage

Our

Comparative

Advantage

Our Strategic

Response

Pardon India Redistributes

unwanted food

throughout

Jharkhand using

renewable

resources.

Focus on using

renewable and

clean resources

when

distributing food

to communities

in Jharkhand.

Funds are quite

small in

comparison to

the costs of

using renewable

resources.

Khila India

connects with

outside

companies and

individuals to

obtain large

donations so we

can afford solar

panels for the

distribution

center and eco-

friendly trucks.

As we retain

more earnings

over time, we

will be able to

build solar

panels to

develop the

communities in

Jharkhand.

India Food

Banking

Network

Establishes food

banks throughout

India and supports

schools to address

malnourishment in

children.

Partners with

various

organizations

and schools

Food banks

located in

inconvenient

areas for

families and

children in need

to access.

Distribute food

to families,

children, and

schools through

food trucks.

As we develop

and become

more widely

known, we will

form nutrition

lessons to teach

in schools and

institutions to

help combat

malnutrition.

Overall, Khila India’s biggest advantage is our ability to use renewable resources and obtain large funds in order to deliver

food to communities by food trucks. The aspect of using a food truck is not represented in any of our competitors. Therefore, we

believe that this advantage is strong enough to override our disadvantages listed above. Khila India also has the advantage of being a

part of an already recognized and credible charity; Feeding America. Feeding America has been rated a 4-star charity (out of four

possible stars) by America's premier independent charity evaluator, which indicates their accountability and transparency. They also

meet all 20 standards of charity accountability as defined by the Better Business Bureau22.

22 http://www.feedingamerica.org/about-us/why-feeding-america/charitable-ratings/

25

XIII.CONCLUSION

The success of Feeding America is rooted in the mission behind the company: giving back to the community through

providing services that hold great importance to malnourished children and families in the rural communities of Jharkhand. The

communities within Jharkhand will benefit from the presence of Khila India as the company is;

Furthermore, Khila India simultaneously provides solutions to the growing problems throughout India. The graphic below shows the

problems on the right and the solutions that Khila India provides to the left.

shown below is a compilation of reasons as to why Khila India is a positive contribution to society and revolutionizing the standard

for non-profit corporations across the globe. For these reasons Feeding America should invest $725,000 in funding Khila India an

extension of the company that will fulfil the company’s mission to end world hunger in India.

Malnourishment of 194.6 million Indians each day

Lack of accessibility for food in rural communities of India

Excessive food waste in India's agricultural industry

•Khila India will provide nutritous food to targeted communities throughout Jharkhand through the use of food trucks.

• Deliver food to communities by energy-efficient food trucks.

• Collect unwanted food from farms to package into meals in the distribution center.

Service oriented

Use sustainable and renewable resources

Blending different social classes to work towards economical success

Problems Solutions

26

XIV. BIBILIOGRAPHY

Briney, Amanda. "Get to Know the Geography and History of India." ThoughtCo. N.p., n.d. Web. 2017.

"Demographics of India." Demographics of India, Indian Demographics Data. N.p., n.d. Web. 2017.

"Economic System." India. N.p., n.d. Web. 2017.

Geewax, Marilyn. "The Tipping Point: Most Americans No Longer Are Middle Class."NPR. NPR, 09 Dec. 2015. Web. 2017.

"Government of India." Discover India. N.p., n.d. Web. 2017.

Gupta, Ankit, and Meghna. "10 Poorest States In India." Kanigas. N.p., 16 Nov. 2015. Web. 2017.

"Home." Rural Poverty Portal. N.p., n.d. Web. 2017.

"Home." Rural Poverty Portal. N.p., n.d. Web. 2017.

"Hunger in India." Hunger in India | India FoodBanking Network. N.p., n.d. Web. 2017.

"India Wastes Rs 44,000 Cr worth Food Every Year." Deccan Herald. N.p., n.d. Web. 2017.

"India Water Crisis - Clean Water In India." Water.org. N.p., n.d. Web. 2017.

Journal, Csr. "Food Wastage In India A Serious Concern." The CSR Journal. N.p., 08 Apr. 2017. Web. 2017.

"Poverty and Its Causes in India." Poverty in India - Facts, Causes and Effects | My India. N.p., n.d. Web. 2017.

"Practical Law." Practical Law UK Signon. N.p., n.d. Web. 2017.

Pti. "About 70 per Cent Indians Live in Rural Areas: Census Report." The Hindu. N.p., 15 July 2011. Web. 2017.

SocialCops Follow. "Decoding Open Data: 2011 Indian Census." LinkedIn SlideShare. N.p., 21 Aug. 2015. Web. 2017.

"Spain." U.S. Department of State. U.S. Department of State, n.d. Web. 2017.

"Top Sites in India The Sites in the Top Sites Lists Are Ordered by Their 1 Month Alexa Traffic Rank.The 1 Month Rank Is

Calculated Using a Combination of Average Daily Visitors and Pageviews over the past Month. The Site with the Highest

Combination of Visitors and Pageviews Is Ranked #1." Top Sites in India - Alexa. N.p., n.d. Web. 2017.

Zimmermann, Kim Ann. "Indian Culture: Traditions and Customs of India." LiveScience. Purch, 20 July 2017. Web.

"10 Facts About Food and Nutrition in India | WFP | United Nations World Food Programme - Fighting Hunger

Worldwide." UN World Food Programme. N.p., 26 July 2016. Web. 27 Nov. 2017.

27

XV. APPENDIX

In the next two pages are Feeding America’s financial statements for the last two years and are encompassed of the income

statement (statement of activities), cashflow, and balance sheet (statement of financial position). These statements were published by

Feeding America along with their annual reports. Khila India’s financial statements were crafted following a similar financial

structure when appropriate since as a subsidiary Khila India would be operating as an extension of the company. When established,

Khila India will positively contribute to the already prevalent financial success of Feeding America.

28