BUSINESS PLAN
MBA (E&L) AMITY BUSINESS SCHOOL
CLASS :- 2012-14
FACULTY: - DR. ANJANI KUMAR SINGH
SUBMITED BY: - VARUN SHARMA
TABLE OF CONTENTS
1.
Executive Summary
2.
Vision Statement
3.
Mission Statement
4.
Industry Overview
5.
Company Ownership
6.
Management Team
7.
Business Strategy
8.
Marketing Strategy
9.
Operating Plan
10.
Applying Technology
11.
Business Risk
12.
Financial Plan
1. EXECUTIVE SUMMARY
PROAB GREEN SOLUTIONS is a premier company in the agricultural sector focusing on Protected Cultivation of horticultural crops through innovative technology of Commercial Greenhouses.
Basically Greenhouses are enclosed structures having controlled climatic conditions and modified environment as per the requirements of crops. Protected cultivation of horticultural crops offers the best choice for diversification in agricultural production. Production of crops under protected
conditions has great potential in augmenting production and quality of vegetables, flowers and in some fruit crops in main and off season and maximizing water & nutrient use efficiency, under varied agro climatic conditions of the country.
We are also providing solutions for irrigation by promoting the concept of drip irrigation in a holistic manner. This method not only economizes the use of water in agriculture by 30 - 50%
depending upon the crop, soil type, season and location but also helps in saving labor to an extent of 60-70% as a very meager labor force would be sufficient to operate the system.
2. VISION
We seek to build a community where people start consuming only high quality fruits and vegetables and improving the quality of agriculture in our nation resulting in sustainable development.
3. MISSION
PROAB Green Solutions aims to capture a considerable market share in organized retailing of fruits and vegetables globally and also to increase exports of Indian Horticultural produce by promoting the concept of protected cultivation and drip irrigation nationwide.
4. INDUSTRY OVERVIEW
India has a wide variety of climate and soil on which a wide range of fruits and vegetable crops are grown annually. During the last two decades, considerable emphasis has been on production of these crops in the country. As a result, area in fruits has risen from 3.75 m ha in 1998-99 to 6.38 m ha in 2010-11 accounting for an increase of about hundred percent. There has also been phenomenal increase in production of fruits from 44.113 million tones in 1998-99 to 74.878 million tones in 2010-11. India accounts for more than 10% of total production of fruit crops. It leads the world in the production of mango, banana, sapota and acid limes. In vegetable production, India is next to China with an annual production 146.60 million tones in 2010-11. As a result India accounts for more than 14% of the world production of vegetables. The average productivity of vegetables is 17.3 tones per hectare which is almost half of USA and other developed countries.
Area under greenhouses in India has gone up from mere 5 ha in 1983 to more than 20000 ha today. This growth in greenhouse area has been made possible by indigenous development of greenhouse technology, liberalized imports of essential components, government popularization programs and globalized economy. Besides Indian Greenhouse fabricators, a number of international firms have entered the Indian Market. Greenhouse technology in India has much more potential than what has been realized so far. It is estimated that the area under greenhouses will increase to over 100,000 ha during next one decade. This estimate is based on similar experiences in countries like China, South Korea, Japan, etc. One hundred thousand hectares under greenhouses mean at least 10 lakh new jobs, greater availability of horticultural produce in domestic market, and development of remote areas. In the process, the greenhouse industry in India would have developed to the extent that we would also be able to export the technology to other developing countries.
5. COMPANY OWNERSHIP
It will be a private limited company consisting of approximately 25 employees.
6. MANAGEMENT TEAM
Board of Directors - 2 General Manager - 1 Technical Advisor - 1 Agriculture Engineer- 1 Sales executive - 1 Accountant - 1 Skilled labor - 2 Semi- Skilled labor - 5 Unskilled labor - 107. BUSINESS STRATEGY
Goals & Objectives :
PROAB Green Solutions seeks to make itself a leader in the agriculture industry.
We believe that we can churn out a large share of the fruits & vegetables market in our target peri urban areas by providing high quality produce.
We assume that people in metropolitan cities are shifting their shopping habits towards high quality fruits & vegetables through organized retail. So our sales distribution channel would be through organized retail.
We understand that there is increasing demand of off-season vegetables. To meet this demand, protected cultivation in Polyhouses is the best optimal solution.
8. MARKETING STRATEGY
Target Market
Primarily our target markets will be the metropolitan cities like Delhi, Mumbai, Kolkata, Chennai, Bangalore, Hyderabad, Jaipur, Chandigarh etc.
Market Analysis
Total market size of India in Vegetables production - 150 million tons Market size of urban areas - 12 million tons Estimated market share of our company - 3.67 %
Estimated market size of urban areas by 2020 - 15 million tons ( assuming 30% population growth )
Anticipated Growth rate by 2020 - 25 %
Products
Since it is an agricultural business, the end products would be finished crops of tomato, cherry tomato, coloured peppers, cucumbers, capsicum, strawberry, grapes etc. We will make sure that we make our customers feel delighted about our fruits & vegetables by adopting high quality standards.
Pricing
Since we are into a commodity business, so we will always thrive upon adopting competitive pricing strategies in order to increase our market share. But our fruits and vegetables will be of higher quality so accordingly we will set our prices as per the norms of the organized retail sector.
Place
Actually we are planning to start our Greenhouses in peri urban areas in order to remain in close proximity to urban markets. We are focusing on prime locations on the outskirts of major metropolitan cities in India especially NCR.
Promotion
As a matter of fact, this particular business do not require much of promotion since it is not having any brand equity. But still we will adopt methods such as Direct marketing, online marketing and participating in various national level agricultural exhibitions.
9. OPERATING PLAN
Our Company is dedicated in the production of high quality horticultural crops in protected conditions under commercial greenhouses henceforth requiring no. of operations to be executed in order to obtain final yield crops.
Various operations in our business are as follows
:
1. Site Selection for Polyhouses
2. Deciding the design and specifications of Polyhouses 3. Selection of Crops
4. Nursery raising in Greenhouse
5. Seedling Transplantations under protected conditions
6. Drip Irrigation systems or micro sprinklers for irrigation purpose 7. Fertigation process incorporating the use of water soluble fertilizers 8. Process of Pruning & Training
9. Control of weeds though the process of Weeding & Hoeing 10. Disease & Insect Pest management
11. Harvesting Stage & Crop Yield
10. APPLYING TECHNOLOGY
Our company is based on the latest technology of Greenhouses envisaging use of polyhouse structures for the purpose of protected cultivation for producing high quality horticultural crops.
We are also using technologically advanced drip irrigation systems & fertigation system in order to reduce the consumption of water by 30-40%.
We will develop website of our company and will be using different types of software for regular monitoring of crops, business intelligence tools, knowledge management software, CRM Software, ERP software and IT solutions for integrating all our greenhouses located at different places to a common server.
11. BUSINESS RISKS
High initial setup cost is required.
Negative trade cycles of organized retail sector may result in lesser demand.
Unfavorable weather conditions can also create problems and damages.
Event of natural calamity would result in complete damage.
Mechanical flaws might take place while installation of irrigation & fertigation systems.
12. FINANCIAL PLAN
For successful execution of any business project it is very essential to have a sound financial plan in order to justify the commercial viability of our concerned project. We have carefully examined the Project Cost estimation, sources of funds, projected cash flows and projected financial statements including balance sheet, income statement and cash flow statement.
Projected Income Statements
(All figures in INR) Year 1 Year 2 Year 3
(a) Net Sales 43,00,000 54,00,000 67,00,000 (b) Cost of Goods sold ( 22,00,000 ) ( 11,50,000 ) ( 15,60,000 ) (c) Fixed expenses
(i) Salary & Wages 12,00,000 14,40,000 16,20,000 (ii) Utilities 3,75,000 4,15,000 4,75,000 (iii) Administration expenses 2,25,000 2,75,000 2,95,000 (iv) Advertising & Promotion 50,000 65,000 80,000 (v) Misc. Operating Expenses 4,50,000 4,90,000 5,25,000 Total Fixed Expenses ( 23,00,000 ) ( 26,85,000 ) ( 29,95,000 ) (d) Profit before Interest payments ( 2,00,000 ) 15,65,000 21,45,000
[ a - ( b + c ) ]
(e) Interest Payments ( 80,000 ) ( 1,25,000 ) ( 1,80,000 ) (f) Profit before taxes ( d - e ) ( 2,80,000 ) 14,40,000 19,65,000 (g) Taxes ( 84,000 ) ( 4,32,000 ) ( 5,90,000 ) (h) Net Profit after taxes ( f - g ) ( 3,64,000 ) 10,08,000 13,75,000
Projected Balance Sheet
( All figures in INR )
LIABILITIES
ASSETS
CURRENT LIABILITIES Accounts payable 1,50,000 Bills payable 1,25,000 Bank overdraft 3,50,000 Outstanding expenses 84,000 FIXED LIABILITIES Bank loan 8,00,000 Unsecured loan 10,00,000 Owner`s equity 20,00,000 45,00,000 CURRENT ASSETS Accounts receivables 2,50,000 Bills receivables 95,000 Cash in hand 2,00,000 Inventory 1,35,000 FIXED ASSETS Land 15,00,000 Office equipment 5,50,000 Machines & instruments 9,80,000 Vehicle 6,90,00045,00,000
SOURCES OF FINANCE :
(All figures in INR) Equity Capital = 30,00,000 Bank Loan = 8,00,000 Govt. Subsidy = 32,00,000 Unsecured loans = 10,00,000 Capital Structure : Total Debts = 18,00,000 Total Equity = 30,00,000
Debt to Equity ratio = (1800000/3000000 ) = 06 : 1
