MGT-611

Vocational Training Center for Employment Generation (VTCEG)

Agribusiness Products

(Term Paper of Entrepreneurship & Business Plan.)

Submitted as a partial requirements of MBA IIIst semester

Submitted to:-
Mr. Rajan Girdhar
Lecturer: - Entrepreneurship & Business Plan.
LSB. (LPU)

LOVELY PROFESSIONAL UNIVERSITY

PHAGWARA

Business Plan for a Startup Business

A business plan is a formal statement of a set of business goals, the reasons why
they are believed attainable, and the plan for reaching those goals. It may also

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contain background information about the organization or team attempting to reach

those goals.

The business goals may be defined for for-profit or for non-profit organizations.
For-profit business plans typically focus on financial goals, such as profit or
creation of wealth. Non-profit and government agency business plans tend to focus
on organizational mission which is the basis for their governmental status or their
non-profit, tax-exempt status, respectively—although non-profits may also focus
on optimizing revenue. In non-profit organizations, creative tensions may develop
in the effort to balance mission with "margin" (or revenue).

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Business Plan

OWNERS

Opportunity for Youth

Kangra (H.P)
Telephone 09780158700
E-Mail VTCEG.Kangra@gmail.com

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I. Table of Contents

I.Table of Contents.................................................................................4

II.Executive Summary............................................................................5

III.General Company Description............................................................6

IV.Products and Services........................................................................7

V.Marketing Plan....................................................................................9

VI.Operational Plan...............................................................................12

VII.Personal Financial Statement..........................................................21

VIII.Startup Expenses and Capitalization..............................................22

IX.Financial Plan...................................................................................23

X.Appendices........................................................................................32

XI.Refining the Plan..............................................................................33

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II. Executive Summary

The business plan is based upon the agricultural products i.e. Sauce and Pickle
(Mixed) the location is Kangra (H.P). In agriculture, agribusiness is a generic term
for the various businesses involved in food production, including farming and
contract farming, seed supply, agrichemicals, farm machinery, wholesale and
distribution, processing, marketing, and retail sales. The term has two distinctly
different connotations depending on context.

Within the agriculture industry, agribusiness is widely used simply as a convenient

portmanteau of agriculture and business, referring to the range of activities and
disciplines encompassed by modern food production. There are academic degrees
in and departments of agribusiness, agribusiness trade associations, agribusiness
publications, and so forth, worldwide. Here, the term

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III. General Company Description

An Idea- Agribusiness Products by the Brand name of (VTCEG)

Benefits-

PERSONAL

1) Profit Max.
2) To use expertise/knowledge
SOCIAL

1) Employment Generation

2) Remove Poverty

3) Favorable for customer

Target Market- Kangra (H.P).

Business Type- Life Style (15-20) employees.

Products – Sauce (Tomato), Pickle (Mixed).

Capital- 2, 50,000 (Loan from Co-op Bank), 2, 50000 Self Financed...

Demographics- /Customers- all segments because it is the need of every INDIAN

household.

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IV. Products and Services

PRODUCTS- Sauce (Tomato), Pickle (Mixed)

MARKET- Rural and Urban (Main Focus)

DEMOGRAPHIES/Customers- all segments because it is the need of every

INDIAN household, because Indians are more passionate towards the spicy.
Demographics or demographic data are the characteristics of a population as
used in government, marketing or opinion research, or the demographic profiles
used in such research. Note the distinction from the term "demography" (see
below.) Commonly-used demographics include sex, race, age, income, disabilities,
mobility (in terms of travel time to work or number of vehicles available),
educational attainment, home ownership, employment status, and even location.
Distributions of values within a demographic variable, and across households, are
both of interest, as well as trends over time. Demographics are frequently used in
economic and research. It is important to distinguish between demographics and
psychographics

Frequency Of Purchase (Monthly) - 1 Kg. (Family having 2-5) members

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QUALITY MAINTAINANCE

• Vinegar based Chemicals are used to preserve products from Algae.

• Supervisor will be there to quality Audits.

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V. Marketing Plan

PRODUCTS- Sauce (Tomato), Pickle (Mixed) LAZEEZ LOGO

MARKET- Rural and Urban (Main Focus)

DEMOGRAPHIES/Customers- all segments because it is the need of every

INDIAN household.

Frequency of Purchase (Monthly) - 1 Kg. (Family having 2-5) members

• COMPETETOR Analysis-

PICKLE

Aeroplane, Pachranga, PAN, KISSAN. Etc

Competitor Pricing-

120 per Kg. (Kissan, Pan)

80-95 per Kg. (Local Vendors)

SAUCE (Tomato)

Kissan- 57 per ½ kg.

Local Products- 45 per ½ Kg.

All figures are taken from original amount of products (MRP) including all
taxes and VAT

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OUR PRICING

Type--(Competitive Pricing)

For Pickle

100 Rs. per Kg. (Mixed Only)

For Sauce

55 Rs. per ½ Kg.

Quality Maintenance

• Vinegar based Chemicals are used to preserve products from Algae.

• Supervisor will be there to quality Audits.

Advertisement Mgt.

• For Rural Market--

Local Cable Networks are best.

Banners in local fairs & Gatherings (Punchayats)

Print advertisement in Local News-papers

For general market—

Banners. Hoardings, Local News Papers etc

Product
Mainly two products are going to be produced pickle, sauce.
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Features and Benefits

PERSONAL

1) Profit Max.
2) To use expertise/knowledge
SOCIAL

1) Employment Generation

2) Remove Poverty

3) Favorable for customer

Customers
All segments because it is the need of every INDIAN household.

Competition
Aeroplane, Pachranga, PAN, KISSAN. Etc

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VI. Operational Plan

Following data will throw some light on the daily operation of our business, its
location, equipment, people, processes, and surrounding environment.

Production
How and where our products or services shall be produced?

We shall be producing Pickle and sauce at our factory which is situated at main
road on kangra and would provide us an easy access to Himachal Pradesh.

Our methods of

 Production techniques–Most of the job shall be done by machines

but much supervision would be required to ensure quality goods and also
we would be starting at a small scale, so very few machines would be
required to produce them and we shall opt for semi automatic machines,
and the cutting of pickle’s raw material will be with the cutter. For
handcraft there is a need of carpeting tools

 Quality control- We shall keep a proper check on quality of raw

material when it shall be received and also each batch of our final produce
shall be tested.

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 Customer service- Our VP- Marketing shall be personally visiting

our distributors & retailers once in a month and listen to the problems faced
if any by them in selling our product. Any type of feedback from customer
shall be cordially invited and we shall try to satisfy our customer to the
fullest extent.

 Inventory control- Since the items is not too costly and its initial
demand may not be too high, so we shall keep a minimum stock of raw
materials for 3-4 days which would be sufficient to produce goods and
would try to use Economic Order Quantity and Just in Time policies to
manage our inventory.

Location
What qualities do we need in a location and the type of location we’ll choose?

Physical requirements:

 Amount of space- We need not require to store much raw material

as our ingredients are lemon, mango, garlic, cauliflower, ginger and tomato
of pickle and sauce respectively because these are not stored more 5 to 10
days. But to make the handcraft we can easily take the bamboo from
anywhere in Himachal Pradesh as Kangra is a hilly area and in these areas
trees of bamboos are easily available. We shall carry put operations in a
factory of 10 square Yards as the machinery required is not too huge in size.

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We shall be allocating a small space for offices of our Instructors and

management..

 Type of building- The Building shall be single storied and shall be

divided into various parts- Shed for storing raw material & Two large
rooms for different processes of production. One Room having different
cabins for our instructor and management.

 Power and other utilities- We shall require an electricity

connection of around 2 to 3 Kilowatts.

Construction:

We shall be spending around Rs.6-8 Lacks for the whole business start-up.

Costs: As the total budget is Rs. 800000 including the first step to the last steps of
distribution and advertisement. The description of the finance is as below

Transportation Rs.150000

Material for pickle Rs.10000

Bamboo( raw form) Rs.100 per crop=10000

Tools and equipment Rs.10000

Preserve Rs.5000

Packing expenses Rs.10000

Salary expenses Rs.15000

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Advertisement Rs.100000

Building Rs.100000

Total Rs.450000(approx.)+100000(as working

capital)=Rs. 550000

The main constraint is the money invested cannot exceed by Rs.800000 because
we have limited money so fund management required efficiently

Personnel

 Number of employees:

There are total 35 employees in the whole process

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DISTRIBUTION OF EMPLOYEES ACC. TO THE

OPERATIONS

FUNCTIONS
Production Auditing Suppliers of
operation rectification R\M section Supply chain
section section and logistics
Distribution of manpower Distribution of manpowers
7 pickle 2 Distribution of manpower Distribution of
13 per handcraft 5people manpower 3
Suppliers
R/M 2diver2cab

 Type of labor

Making pickle, sauce and handcraft does not require much

technical skills on the part of workers. So, semiskilled laborers can be trained
to work on machines.

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 Where and how will you find the right employees?

For sales executive we will prefer local energetic and enthusiastic people, who
have knowledge about the domestic market.

We think we will be able to procure workers from the region where our plant is
going to be established. Our plant will be situated at Kangra, Himachal
Pradesh and raw material source is also not too far. Skilled or semi-skilled
workers can be hired from the places or villages around for the purpose.

 Training methods and requirements:

As we are hiring semi-skilled workers, some sort of training will be essential

for all the workers. We will give them “On the Job Training”. The will be
working on original machines and production of the pickle, sauce will continue
even during training.

Legal Environment

 Licensing and bonding requirements:-contractual agreement giving right

to others to use intellectual property in return for a royalty or fee

 Trademarks (pending, existing, or purchased: - A distinguishing

word.name or symbol used to identify a product.

Copyright:-right given to prevent from printing, copying, or publishing any

original works of authorship

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Personnel

 Type of labor:-as such their is no specific skilled labor we required because

we set our plant in hibachi Pradesh and our business mainly deals with
handicrafts ,pickles and house wife's who are willing to work they can use
help to make pickles, handicrafts ,sauces.

 Training methods and requirements: - there is no need to require for training

an house wife’s, illiterate women’s they can already know how make pickle,
sauces etc

Inventory

 What kind of inventory will you keep: raw materials, supplies, finished

goods? For pickles and sauces we need fresh vegetables tomato's etc

 We shall keep raw materials (Herbal Plants), our work in progress at

different stages and finally finished as pickles, handcrafts

Suppliers

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 Names and addresses:-vocational centre for employment generation,

dust. Kangra himachal pradesh

 Type and amount of inventory furnished
 Credit and delivery policies

Managing Our Accounts Payable

We shall be purchasing goods on 7 days credit as our average inventory period for
raw material would be 3-4 days and for finished goods shall be 3 days. However
the business is wholly cash & carries business, so we think we shall be able to pay
our creditors after realizing the cash from debtors.

Do our proposed vendors offer prompt payment discounts?

If any vendor offers us attractive discounts on cash payment, we may opt for the
offer depending upon the availability of cash with us.

Management and Organization

Who will manage the business on a day-to-day basis? What experience does that
person bring to the business? What special or distinctive competencies? Is there a
plan for continuation of the business if this person is lost or incapacitated?

If you’ll have more than 10 employees, create an organizational chart showing the
management hierarchy and who is responsible for key functions.

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Include position descriptions for key employees. If you are seeking loans or
investors, include resumes of owners and key employees.

Professional and Advisory Support

List the following:

• Board of directors

• Management advisory board

• Attorney

• Accountant

• Insurance agent

• Banker

• Consultant or consultants

• Mentors and key advisors

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VII. Personal Financial Statement

Include personal financial statements for each owner and major stockholder,
showing assets and liabilities held outside the business and personal net worth.
Owners will often have to draw on personal assets to finance the business, and
these statements will show what is available. Bankers and investors usually want
this information as well.

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VIII. Startup Expenses and Capitalization

You will have many startup expenses before you even begin operating your
business. It’s important to estimate these expenses accurately and then to plan
where you will get sufficient capital. This is a research project, and the more
thorough your research efforts, the less chance that you will leave out important
expenses or underestimate them.

Even with the best of research, however, opening a new business has a way of
costing more than you anticipate. There are two ways to make allowances for
surprise expenses. The first is to add a little “padding” to each item in the budget.
The problem with that approach, however, is that it destroys the accuracy of your
carefully wrought plan. The second approach is to add a separate line item, called
contingencies, to account for the unforeseeable. This is the approach we
recommend.

Talk to others who have started similar businesses to get a good idea of how much
to allow for contingencies. If you cannot get good information, we recommend a
rule of thumb that contingencies should equal at least 20 percent of the total of all
other start-up expenses.

Explain your research and how you arrived at your forecasts of expenses. Give
sources, amounts, and terms of proposed loans. Also explain in detail how much
will be contributed by each investor and what percent ownership each will have.

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IX. Financial Plan

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CASH FLOW STATEMENT

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEA

cash flow from operating

activities

552500 645200 770000 885

cash sale 4252000 0 0 0

Sub total Cash from 552500 645200 770000 885

Operations 4252000 0 0 0

Additional Cash Received

Sales Tax 0 0 0 0

New Current Borrowing 0 0 0 0

New Long-term Liabilities 0 0 0 0

Sales of Other Current

Assets 0 0 0 0

Sales of Long-term Assets 0 0 0 0

New Investment Received 0 0 0 0

552500 645200 770000 885

Subtotal Cash Received 4252000 0 0 0

Expenditures from Operations

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3534460 455020 519502 626352 701

Cash Spending 0 0 0 0

Subtotal Spent on 3534460 455020 519502 626352 701

Operations 0 0 0 0

Additional Cash Spent 0 0 0 0

Sales Tax 170080 221000 258080 308000 354

Principal Repayment of Current

Borrowing 0 0 0 0

Purchase Other Current

Assets 0 0 0 0

Purchase Long-term
Assets 0 0 0 0

Dividends 0 0 0 0

Subtotal Cash 477120 545310 657152 737

Spent 3714680 0 0 0

112848 147
Net Cash Flow 537320 753800 998900 0

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PROFIT AND LOSS

ACCOUNT

2 3 4 5
PARIICULAR 1 YEAR YEAR YEAR YEAR YEAR

552500 645200 770000 885000

Sales 4252000 0 0 0 0

276250 322600 385000 442500

direct cost of sale 2126000 0 0 0 0

other product expenses 0 0 0 0 0

276250 322600 385000 442500

total cost of sale 2126000 0 0 0 0

gross margin% 50% 50% 50% 50% 50%

expenses

103620 113982 125380 137918

payroll 942000 0 0 0 0

marketing expense 600000 400000 380000 750000 800000

electricity 180000 190000 200000 210000 220000

telephone 30000 30000 30000 30000 30000

utility 0 0 0 0 0
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Balance
sheet

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PARTICULARS YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEA

Share capital 1000000 1000000 1000000 1000000 10

Reserves and surplus 0 0 0

secured loans 500000 500000 500000 500000 5

current liabilities and provision 280000 300000 320000 340000 3

loans

1780000 1800000 1820000 1840000 18

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PARTICULARS YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Fixed assets

30000
cab 0
depreciatio
n 30000 227000 224000 221000 218000 215000

20000
machinery 0
depreciatio
n 20000 180000 160000 140000 120000 100000

current assets 835680 662200 460100 373520 287750

112848 147983
cash 537320 753800 998900 0 0

miss.exp 0 0 0 0 0

178000 180000 182000 184000 183600

0 0 0 0 0

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SALARY monthly

Employees salary(Rs) total

2 marketing executives 5000 10000

2 driver 2500 5000
3 helper 1500 4500
workers
6 skilled 4000 24000
4 unskilled 2500 10000
6 packaging 1500 9000
2 supervisor 8000 16000

78500
FIXED EXPENSES

advertisement

local cable expense 15000

local newspaper 10000
hoardings 20000
pan flit 5000

50000
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cab{2} 300000

electricity/ month 15000

rent/ month 10000 10000

tools & equipments 200000 200000

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X. Appendices

Include details and studies used in your business plan; for example:

• Brochures and advertising materials

• Industry studies

• Blueprints and plans

• Maps and photos of location

• Magazine or other articles

• Detailed lists of equipment owned or to be purchased

• Copies of leases and contracts

• Letters of support from future customers

• Any other materials needed to support the assumptions in this plan

• Market research studies

• List of assets available as collateral for a loan

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XI. Refining the Plan

The generic business plan presented above should be modified to suit your specific
type of business and the audience for which the plan is written.

For Raising Capital

For Bankers

• Bankers want assurance of orderly repayment. If you intend using this plan
to present to lenders, include:

o Amount of loan

Capital- 2, 50,000 (Loan from Co-op Bank), 2, 50000 Self Financed...

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