Business plan on an organic farm "Green view"

Executive Summary:
What are the benefits of using hand wash if the food is intoxicated? Have you ever
imagined using birds to protect your crops which you try to keep away from your crops
land? After a research we have come up with an extensive plan where we will utilize
chicken around our crops to prevent our crops from insects/pests on the other hand
wastages from the chicken will work as fertilizer and after that we are not going to use
any chemical fertilizer and chemical insecticides. Not only that, in recent time statistics
says that, Farmers are growing crops, fruits, vegetables by using heavily toxic fertilizer
and insecticides. But it has been proven by food experts that the nutritious facts are
comparatively much high in vegetables and fruits which are naturally grown (without
using any chemical fertilizer and chemical insecticides). In order to overcome or
eliminate this problem of nutrition facts we have come up with a business plan that will
be replacing the hybrid system of production by foods that are naturally produced without
using our chemical fertilizer or spray. Therefore, we are going to start organic farming in
a different way by which we will be able to utilize unused lands which are in remote
places where there is no chance of commercial activities are in near future. In addition to
that we are going to employ local handicap people like deaf and dumb and beggars so
that we can contribute to the society by empowering under privileged citizens of the
country. It is needless to say that the organic firming will not cost any environmental
hazard or pollution to the living nature.

Green View, Bangladesh (Organic Farm) – Business Plan 1 | P a g e

Company description
Green view is a firm that produce 100% organic vegetable, fruit, chicken and fisheries.
For this project we will require 66 Sotangsha or 44 Katha or 2 Bigha land and capital
requirement is Tk. 1,25,00,000. Our primary focus is narrow market differentiation
strategy. We will form our business as a partnership business having 5 partners, so we
will finance total capital 80% (16% each partner) 20% will be loaned from Eastern Bank
Ltd. .
1.1 Uniqueness of the Business:
To actualize our organic farm, we will
 Use hens around crops and pest trap as insect killer
 Use wastage from hen and cows as fertilizer in the crops.
 Use wheat, rice and mustered bran as fish feed in the fisheries.
 Use crop weeds as food for cows.
Therefore, we will be able to avoid chemical fertilizer, insecticides and artificial
feeds.
1.2 Vision:
To establish organic farming to contribute in a sustainable healthy nation & removing
poverty though it by creating employment.
1.3 Mission:
 Producing organic food at minimum cost and providing consistent supply in the
consumer market.
 Improve food quality on basis of nutrition.
 Ensure the presence of multi-vitamins, minerals, protein, iron, fiber.
 Creating awareness about organic food among the mass population.
 Becoming the role model of this concept and contribute to develop in countries
economy.
1.4 Product & Services:
Fish (Catfish, Climbing Perch Fish), Egg, Chicken, Banana, Jack Fruit, Mango,
Papaya and so on.Seasonal vegetables like: Potato, Cauliflower, Carrot, Bean, Pumpkin,
Tomato, Brinjal, Cucumber, Multi greens and others.
We will have MOU (Memorandum of understanding) with local chain shops like (Agora,
Meena Bazar, Shawpno) to whom we will sell our products at bulk quantity. They will
definitely buy our organic products, because our price will be same as market price of
normal products.


Industry Analysis
2.1 Business Form and Partners:
Our business will form and conducted by the Bangladesh Partnership Act-1932
(General Partnership). Numbers of partners are 5. All partners contribute 80% (16% each
partner) 20% will be loaned from Eastern Bank Ltd. in the capital.
Five (5) Partners are:
Kishuwara Binta Kabir
Ariful Haq
Rakib Hasan
Mithun Khan
Ema Aziz
2.2 Financial Budget: Total Capital Budget Tk. 1,25,00,000. Full amount will be
collected from 5 partners.
Kishuwara Binta Kabir Tk. 20,00,000
Ariful Haq Tk. 20,00,000
Rakib Hasan Tk. 20,00,000
Mithun Khan Tk. 20,00,000
Ema Aziz Tk. 20,00,000
Bank Loan Tk. 25,00,000
Total: Tk. 1,25,00,000
2.3 Location: Hizla,Shakta Union, Keraniganj, Dhaka.
Target Location


2.4The key success factors:
 Introducing organic farming with innovative techniques.
 Producing organic food with health benefit.
 Differentiation base on green (food) marketing.
 Empowering unprivileged people.


Market Analysis
4.1 External Environment Analysis:
Our external environment analysis has designed on General environment, Industry
environment and also Competitors environment. These three external environment factors
have much influence on our business performance.
4.1.1General Environment: General environment is the external environment of
any industry on which industry has no control but the general environmental factors has
great impact on any business.
a. Economic Segment: The inflation rate in Bangladesh is 6.84%,
Unemployment rate 4.5%. Personal Savings in Bangladesh increased to
1771.53 BDT Billion in 2012 from 1536.82 BDT Billion in 2011 which is all
time high record. GDP growth rate is 6.12% and per capita income is 1190$.
b. Socio-cultural Segment: Bangladesh is a demographic country and going to
become a secular country. Now male and female work together, take
education, participate in each and every event. Even in many work sectors
(Like garments, hospitality industry) female are more advanced than male. So,
female are also our potential employees. Peoples are also becoming aware
about their health and nutrition’s, for this the number of Gym going persons
(both male and female) and gymnasiums are raising. Moreover, people are
General
Environment
•Economic
•Socio-culteral
•Global
•Technological
•Political/Legal
•Demographic
Industry
Environment
(Porter's 5
forces model)
•Bargaining Power of
Suppliers
•Bargaining Power of Buyers
•Threat of Substitute
•Threat of New entrants
•Intensity of Rivalry
Competitors
Environment


also changing food habit concentrating on healthiness although the number is
much low as compared with whole population.
c. Global Segment: Bangladesh maintaining its global communication with
other country by FDI, exporting and importing businesses. Bangladesh
government encourages FDI, so many countries trading here and also
increasing competition in every industry.
d. Technological Segment: Bangladesh is a developing country having less
contribution in technological innovation but the usage of technology is so high
in Bangladesh. Nowadays television is available in most of the houses.
Mobile phone subscribers are 11.5cr and internet subscribers are 4.41cr.
Facebook users are also 30,352,680 in Bangladesh.
e. Political/Legal Segment: Forming a partnership business is very easy by the
Bangladesh partnership act 1932 and also salvation. There is no double
(Corporate tax, Income tax) taxation. Only the partners will pay income tax if
the individual income per year exceeds tk. 220,000. Now politically
Bangladesh is in stable position and perhaps this stability will continue for
long time.
f. Demographic Segment: Demographically we will achieve a significant
advantage in case of number of customers. Bangladesh is a small country but
its population is very high,
4.1.2 Industry Environment Analysis: To analysis our fast food industry we
have focused on Michael Porter’s 5 forces model.
Figure: Michael Porter’s 5 Forces Model


a. Bargaining Power of Buyers (Low): Bargaining power of buyers is also very
high if we analyze the as usual vegetables, chicken, egg, cow and fruits.
Because there are many suppliers who supplying these items. Customers have
much choice and power for switch one shop to another. But in another sense,
bargaining power of buyers is low, if they look for 100% organic vegetables,
egg, chicken, fruit, cow and in that case our firm will be only choice for
customer to serve with 100% organic.
b. Bargaining Power of Suppliers (Low): Our raw materials are mainly
domestic vegetable seeds saplings, fish trout, fish/chicken/cow feed etc. There
are huge Suppliers in our country to support the supply of our raw materials
however we won’t use any artificial feed. So, we have huge choice to switch
one supplier to another.
c. Threat of Substitute (low): There is no substitute of vegetables, egg, meat,
fish and fruits which we will produce. If person want to live he/she must have
to take the food products we will serve.
d. Threat of New Entrants (High): Threat of new entrants is also very high in
agricultural sector in Bangladesh is open. Anyone can take entry in this
market as well as legal permission is also easy to take. But as our business is a
social business and our vision is social empowerment, it will not be
considered as threat.
e. Intensity of Rivalry (Low): The percentage of farmers in Bangladesh is
gradually decreasing. Some of the farmers are going abroad and some other
involving in different occupation rather cultivation. On the other hand, there
may be very few farmers who producing organic vegetables, chicken, egg,
cow and fish.
4.1.3 Competitor environment (Overview) Analysis: There is no business exist
where has no existence of competition. This competition may more or less. If we think
from 100% organic point of view, we may face very less competition. On the other hand,
if we don’t consider Organic products, then the number of competitor is comparatively
high. But we can adjust this competition because we will supply our organic products at
the same price of non-organic products.
4.2 SWOT Analysis:
4.2.1 Probable Opportunities:
 Single Taxation Facilities. (As our business is partnership business, only the
owners will pay tax on their individual income and no corporate tax on our
business)


 As we are providing organic at same price so it will be chain shops as they
have conscious customers who will be interested in buying organic product
they will make it their promotion factor and will like to the publicity of
organic food.
 Growing demand of the organic foods for the health conscious people.
 Opportunity to promotional activity by online (Almost every person uses
mobile phone among them the young generation are also use internet for
educational/professional purpose and they also active in Facebook. So, we can
advertise by Facebook).
 High number of customers the population in Dhaka 15.39 million.
 Living standard is improving and people are getting more health conscious so
we can easily convince to get close to them.
4.2.2 Probable Threats:
 Most of the customers are unaware about nutrition, organic farming and
foods.
 Attaining proper attention from the customer as it is a very new concept
 Obtaining faith of the customer about the authenticity of the organic product.
4.2.3. Probable Strengths
 Ability to attract health conscious customers and super shops who want to
make their business sustainable by providing healthy organic foods to their
customers.
 Low cost in production due to avoiding use of chemical fertilizer and
insecticides
 Our products will be 100% organic. So, we can publicize our products as
green rather green washing.
4.2.4 Probable Weaknesses
 No brand image as we are starting initially.
 Unable to contribute heavily in the market share alone by a single firm. But
as our target is social empowerment our success will be more if other farmers
and unemployed persons start organic farming to make Bangladesh as a
healthy nation.


Marketing Plan
5.1 Marketing Activity:
Our primary focus is to implement B2B relationship. So, we have targeted Shwapno,
Agora, Meena Bazar and like other chain shops. So, we have no need to do mass
advertisement. But we have to build a strong relationship with the chain shops by direct
communication as our target shops are limited to 3-6 however they have many branches
over Dhaka city.
Actually have very narrow scope as we are going to get involved in B2B policy. Here
you may ask “why they will purchase our organic products?” or “What are the actions to
convince them?”
In case of marketing our Organic products we have 2 strong weapons.
1. Quality assurance (100% Organic)
2. Low Price
We will provide guarantee about our product quality at same market price as
compared with non-organic products. We are sure that if anybody gets organic products
with same price of non-organic products, he/she will definitely buy our product. To
establish a brand image as organic farmer among consumers, we will do some sort of
promotional activities.
5.1.1 Promotional Activities:
 We will open social networking page in Facebook, YouTube, twitter etc. and
share our process of growing organic vegetables and fruits by which we will be
able to capture the attention of people in social networking sites. We will also
record harvesting procedure of vegetables and will show the benefits of naturally
grown foods by a video footage. We can share the videos in Facebook, YouTube,
twitter etc.
 We will ask our customer to give reviews and continuous feedback to increase our
food quality. We will make check list form in which the customer will give score
and their comment and suggestion. After a initial period we will hire dedicated
sales representative in many super shops to spread or brand the increase of “Green
View”.
 We will also take the help of our customer to spread the business by giving
leaflets.
 Hash (#) tag process to influence customer to share the benefits organic foods.
 We will insert a small promotional sticker to each product like egg, banana, and
other sticker insert able vegetables, where we will entitle our farm address,
contract address (Mobile number, E-mail Address) for further information.


 On the other side as it will be a competitive advantage for a chain shop like
Shwapno so they will also promote our organic products!! They often send
brochures to their customers regarding any sale or updates for any new products
where they'll be promoting our organic products as well under the brand name of
"Green View "At the very beginning of our business, getting connected to the
market leaders like Shwapno, Agora, Meena bazaar will be a great break through
for us.
5.1.2 Steps of Delivering Products to Chain Shops:
1. Our first Step is direct communicating by our marketing division with Chain
shops operating in Dhaka city and showing them our whole process of farming to assure
quality.
2. Taking initial order from them.
3. Delivering order with due time.
4. For further order we will continue communication with them through mobile
phone and e-mail.


Management Team
6.1 Management Structure Plan:
Managing Director
(Ariful Haq)
Procurement &
Production Manager
(Ema Aziz)
2 Security Guard
8 For
Vegetables+Fruit
Cultivation
1 Fishery
Caretaker
Head of Marketing
and Idiation (Rakib
Hasan)
HR & Financial Manager
(Mithun Khan &
Kishuwara Binta Kabir)
1 Accountant to Keep Records


Operation Plan
7.1 Strategy Formulation (Business Level Strategy):
Figure: Our Business Level Strategy
7.1.1 Reason for Choosing Narrow Scope Differentiation: Our business level
strategy is fully based on Narrow Differentiation rather than being cost leader. As we are
new comer in the business with a very new concept, it will be very hard or may
impossible for us to be cost leader, because we have no prior experiences in business,
profitability, employee efficiency etc. Moreover, the cost leaders in any industry have
gained this competitive advantage after performing more than minimum five years.
Another risk of being cost leader is falling in product quality. We won’t compromise with
our food quality as our vision is to provide high quality organic food to customers as
alternative of medicine. For this we will differentiate our product based on organic
farming, vegetables& dairy & fishes will be produces in organic way. All of our food
products will made only bases on vegetables by maintain nutrition’s and health benefits.
7.2 Strategy Implementation, Overall Management Plan:Our Business strategy is
Narrow scope differentiation. We will differentiate our all organizational functions like
Human resource, Operations (Productions), Marketing/Sales etc; however, our main
focus is on differentiate organic products like vegetables, diaries & fishers.
Business Level
Strategy
Integration of Both
Cost Leadership
and Differentiation
Differentiation
Broad Scope
Differentiation
Narrow Scope
Differentiation
Cost Ledership


7.2.1 Differentiation in using raw materials:
All the feed we will use for fish, chicken and cows will be 100% organic. To
ensure this, pests of vegetables will be feed for chickens, weed will be used as food for
cows and wastage of cows will be used as fish feed. We know wastage from 4 cows is
insufficient for fishery, for this reason we will provide wheat and rice bran as additional
fish feed.
On the other side wastage from the chicken around the crops field will also be used as a
fertilizer
7.2.2 Differentiation in stuffing:
As our vision is to remove poverty by creating employment for the under
privileged so we will hire local underprivileged people. We will employ beggars who
couldn't find any job and will train up them about our farming process. We can also
create employment to the handicaps like deaf and dumb who cannot find any job.
7.2.3Differentiation in Production:
We will use 2 Bigha or 66 Sotansho Land for our “Green View” project. 10
Sotansho will be used for fisheries. According to information of Motsho Odhidoptor,
Figure: Farm Framework


5000 Koi can be cultivated within 10 Sotansho. Koi matured with 1 year with each 1
pound of weight. That means in a year we will be able to nourish 10000 koi. If we
consider 2000 as miscarriage, we will gain in a year at least 8000 x 1pound= 8000 pound
or 3624 kg fish. 1 Full time employee is required for fishery.
We will divide 8 plots each 10 Sotansho to cultivate seasonal vegetables and fast growing
fruits. Our plan is to cultivate 3-4 times vegetables over a year. As our promise is to
avoid the use of insecticides, we will make hen house around each vegetables garden and
allow hens to move around our vegetables garden to eat insects/Pests as their feed. But
the hens won’t be allowed to enter inside the garden. To kill the pests of the center
position of the garden we will use pest traps. The wastage of hens will be used as
fertilizer in our project. If require we will use government approved organic fertilizer.
Statistics says that on average it is possible to get 1kgs vegetables in each 3.5 square feet.
As we will use (480 x 10 x 8) 38400 square feet for vegetables and fruit, we will be able
to grow 38400/3.5=10971 kg vegetables in each times. We take a round figure of 10000
kg from each time of cultivation. So, total vegetables we will grow over a year will be
10000*4= 40,000 kg by cultivating 4 times in a year.
Initially we will start our organic chicken project by 160 hens. As we will make 1 hen-
house around each vegetable plot, our total hen house will be 8 and we will keep initially
20 hens in each house. That means we can maintain total 8*20=160. Within 160 hens 16
hens will be cock, so 160-16=146 will be eligible to provide egg. In the first year chicken
will start to provide egg after 6 months. If 120 hens among 146 provide egg, our 1st
year
egg production will be 120*180= 21600 eggs. 95% of egg will sold out, and remaining
eggs will use for reproduction.
We will implant Banana tree around our whole farm as the alternative of boundary. This
will save some costs and will add some additional revenue. Our plan is to implant
initially 500 banana sapling around our farm. As banana is fast growing and also provide
banana within 1 year as well as there is no need to implant banana tree again after one
production.
For 8 plots and nourishing hens we will employ 8 employees as full time worker. Here on
average they will work approximately 3-4 times each day.
As we have to make a large house to store agricultural equipment and materials. After
production all the vegetables, Fruits, and chicken will be sold to large chain shops like
Shawpno, Agora, Meena Bazar. We will sell our products to them as they have customers
who looking for organic foods. Not only that this memorandum of understanding
between us and them will cut some additional cost. Their future demand will also provide
insights to take decisions to expansion in production. Here a question will arise, are they
buy from us? Yes they will but because our price will be same as non-organic prices. We
have performed a survey among a sum of people and the finding is, 100% of them will
buy organic products if the price is within their regular budget.


7.3 Action Plan Overview:
 Capital Allocation.
 Finding unused land.
 Set up the farm.
 Buying live stocks vegetable, seeds and other initial requirements
 Recruiting employees.
 Training up the employees
 Implementing business plan
 Promoting of the farm trough the social media
 Getting authorization from Govt.
 Contacting with our clients
 Harvesting crops and collecting products from live stocks.
 Finally delivering our products to them


Financial Projection
8.1 Financial Plan:
For any kind of business, it is used as indicator to take decision, whether we will go for
invest or not. This plan provides the entire expenditure outline and also possible outflows
will generate from business. Another most important this is, we can get idea about
Payback period and breakeven point from this chapter.
8.1.1 Projected Salary Sheet for Two years.
We will need to employ total 14 employees for this whole project.
Number of
employee
First Year (2016-17) (Tk.) Second Year (2017-18) (Tk.)
Monthly
Salary Per
employee
Yearly
salary per
employee
2 Festival
Bonus-
each 2500
Yearly
Salary Per
Employee
Monthly
Salary Per
employee
Yearly
salary per
employee
2 Festival
Bonus-
each 2750
Yearly
Salary Per
Employee
12 Part
Time
4,600 55,200 4,600 59,800 5,060 60,720 5,060 65,780
2 Full-time
Guard
8,000 96,000 8,000 104,000 8,800 105,600 8,800 114,400
Total Expense for 12 employees (Year 1) 717,600
Total Expense for 12 employees
(Year 2)
789,360
Total Expense for 2 Guards (Year 1) 208,000
Total Expense for 2 Guard
(Year 2)
228,800
Net Salary expense for Year 1 925,600 Net Salary expense for Year 2 1,018,160
Employee segmentation:
Guard = 2 Employees (Full Time)
For Fishery = 2 Employee (Part Time)
For 8 (Vegetable+Fruit) Segment = 8 Employees (Part Time)
Auditor (To look after all activity) = 1 Employee (Part Time)
Accountant (To keep record all financial data) = 1 Employee (Part Time)
Total = 14 Employees
Salary will be increase 10% each year, according to this way salary expense will be in
third year = 1,018,160 x (1.10) = 1,119,976
So, total salary expense for three years will be= 925,600+1,018,160+1,119,976=
3,063,736
Salary will be increased at 10% each year if business runs profitably. (Authority has the
right to change any decision)
Yearly Salary Per employee = Monthly salary per employee x 12 + Festival Bonus
Total Salary for 14 employees = Yearly salary per employee x No. of employee


8.1.2 Projected Initial Investment Amounts:
Sl. No Particulars Initial Investment
01 Land 65,00,000
02 Land Registration 7,80,000
03 Initial Land Makeup cost 30,000
04 Fencing Cost for Vegetable Garden 150,000
05 Fishery Digging Cost 70,000
06 Hen’s House cost (3000 Per*8) 24,000
07 Water Pump and Piping Cost 25,000
08 Electricity Connection and Bills for 24,000
09
Agricultural Tools cost
(Wheeler + Spade + Sickle + Drag + Roller + Dibber
+ Curved Knife Harrow + Bucket)
32,000
10 Boundary with Banana Tree, Gate 15,000
11
Warehouse for tools, employees rest house + Cow-
house
35,000
12 Fish Trout Cost (10,000 Each Year) 10,000 (For 1st
Years)
13 Fish Feed (60,000 Each Year) 60,000 (For 1st
Year)
14 Lime (500 each year) 500 (For 1st
Year)
15 Hen (160 Pcs*50) 8,000
16 Vegetables Seeds and Sapling Cost (20000 Per Year) 20,000 (For 1st
Year)
17 Other Overhead expenses 50,000 (For 1 Year)
18 Cash on hand 200,000
19 Promotional cost 50000
20 Employee Salary 462,800 (For 1st
6 month)
21 Pest Trap (15*400) 6,000
22 Hen’ feed (30,000 per year) 30,000 for 1st
year
Total Projected Initial Cost Tk. 85,82,300
Advance (Security) for land budget is Tk. 100,000 (For 8 years Contract)
When we get back this amount (at 7% discount rate) the Present value will be,
PV0 = (100,000) / (1+0.07)8
= Tk. 58,200
So, here cost for advance (for 8 years) is = 1000,000-58,200 = Tk. 41,800
Cost for advance as security for each year = (41,800 / 8) = Tk. 5,225


8.1.3Depreciation Calculation of Depreciable Fixed assets: All the Depreciable
fixed assets will be depreciated by using straight line method over the lifetime.
Sl.
No.
Particulars Useful Life Cost (Tk.)
Per year
Depreciation
(Tk.)
01 Hen-House cost 3 Years 24,000 8,000
02 Water Pump and Piping cost 8 Years 25,000 3,125
03 Agricultural Tools 8 Years 32,000 4,000
04 Warehouse for tools,
employees rest house + Cow-
house
3 Years 35,000 11,667
05 Fencing Cost 5 Years 150,000 30,000
Depreciation Cost per year for depreciable fixed asset 56,792 (Tk.)
8.1.4Projected Starting Balance Sheet:
Green View
Starting Balance Sheet
As on January 01, 2016
Particulars Taka
Assets:
Cash
On hand
Advance for Position (land)
Budgets for Salary and Rent
Other Overhead Budgets
Inventory
Fish Trout
Fish Feed
Lime
Hen
Vegetable Seeds + Sapling
Cow
Cow-feed
Pest trap
Hen’s Feed
Total Current assets
200,000
100,000
612,800
239,000
10,000
60,000
300
8,000
20,000
60,000
4,000
6,000
30,000
1,151,800
198,300
1,350,100


Fence
Hen-House
Water Pump + Piping
Agricultural Tools
Warehouse for tools, employees rest house and cow-
house
Total Fixed Assets
Total Asset
Equity and Liability:
Total Equity Capital
Liability
Total Liability and Equity
150,000
24,000
25,000
32,000
35,000
266,000
1,616,100
1,616,100
0.00
1,616,100
Other Overhead Budgets:
Initial Land Makeup cost 30,000
Fishery Digging Cost 70,000
Boundary with Banana Tree, Gate 15,000
Electricity Connection and Bills for 1 year 24,000
Overhead expense budget for 1 year 50,000
Promotion 50,000
239,000
8.1.5Projected Revenue Statement for 3 years:
Particulars
For 1st
Year For 2nd
Year For 3rd
Year
Quantity
Unit
Price
Taka Quantity
Unit
Price
Taka Quantity
Unit
Price
Taka
Banana
Egg
Hen
Fish
Vegetables
+Fruit
480 Palm
20,020Pcs
160 Pcs
3,624Pound
40,000KG
150
6
150
100
20
72,000
120,120
24,000
362,400
800,000
600 Palm
109,500Pcs
300 Pcs
3,624Pound
40,000 KG
150
6.3
155
105
21
90,000
689,850
46,500
380,520
840,000
800 Palm
150,000 Pcs
400 Pcs
3,624Pound
40,000 KG
150
6.5
160
110
22
120,000
975,000
64,000
398,640
880,000
Total revenue will be 1,538,520 2,298,870 2,789,640


8.1.6 Projected Income Statement for 3 years:
Green View
Projected Income Statement
For the year ended on December 31
Particulars 2016 2017 2018
Total Sales Revenue
Cost of goods sold (Variable cost)
Boundary with Banana Tree
Fish Trout cost
Fish Feed
Lime
Hen
Vegetable seeds and sapling cost
Pest Trap
Hen’s Feed
Gross Profit (EBITDA)
Selling & administrative expenses:
Rent
Land Makeup Cost
Depreciation on Fencing
Fishery digging cost
Depreciation on Hen’s house
Depreciation on Water Pump and Piping
Electricity Connection and Bills
Depreciation on Agricultural Tools
Depreciation for tools, employee rent house,
cow house
Salary
Time value cost for advance money
Promotion Expense
Total Selling and administrative expenses
Net Income
1,538,520
15,000
10,000
60,000
300
8,000
20,000
6,000
30,000
1,325,220
150,000
30,000
30,000
70,000
8,000
3,125
24,000
4,000
11,667
925,600
5,225
50,000
1,311,617
13,603
2,298,870
10,000
60,000
300
20,000
30,000
2,084,570
150,000
30,000
8,000
3,125
24,000
4,000
11,667
1,018,160
5,225
50,000
1,304,177
780,393
2,789,640
10,000
60,000
300
20,000
30,000
2,545,340
150,000
30,000
8,000
3,125
24,000
4,000
11,667
1,119,976
5,225
50,000
1,405,993
1,139,347


8.1.7Projected Cash Flow Statement with 3 years’ outcome:
Green View
Projected Cash Flow Statement
For the year ended on December 31
Year Cash
Flows
Cumulative
Cash Flows
Discount
Factor,
I=7.5%
PV0 Discounted
C.C.F
0 -1,616,100 -1,616,100 1 -1,616,100 -1,616,100
1 13,603 -1,602,497 0.94 12,787 -1,603,313
2 780,393 -822,104 0.88 686,746 -916,567
3 1,139,347 317,243 0.82 934,265 17,698
(Note: We have considered 7.0% discount rate to be protected from inflationary
loss. Our current inflation rate is 6.32%. So, we considered a round figure 7.5%
discount rate)
8.1.8 Projected Payback Period
PBP = 2 + (822,104/1,139,347)
= 2.72 Years
8.1.9 Projected Discounted Payback Period
PBP = 2 + (916,567/934,265)
= 2.98 Years
8.1.10 Break-even Point Analysis using PBP:
Here, Time period used 3 years = (3 x 365) = 1095 days,
Total sales revenue for 3 years is (1,538,520+2,298,870+2,789,640) = 6,627,030
So, Sales per day = Tk. 6,052
We found, Projected payback period = 2.72 years or (365 x 2.72) = 993 days
Projected discounted payback period = 2.98 years or (365 x 2.98) = 1088 days.
Projected Break-even sales = (Per day sales x PBP days)
= (6,052x 993) = Tk. 6,009,717
Projected Discounted Break-even sales = (Per day sales x Discounted PBP days)
= (6,052 x 1088) = Tk. 6,584,576


8.2 Plan for Further Expansion:
If we concentrate our 3rd
year sales revenue and net income, we will see that our probable
Sales revenue is Tk. 2,789,640 and Net income is Tk. 1,139,347. That means the Rate of
return in 3rd
year is = (11,39,347 /27,89,640) x100 = 40.82%. This rate of return will
gradually increase after 3 years due to economies of scale and also our target is to
increase revenue 10% each year by enhancing the production level.
According to our assumption Sales revenue for 4th
and 5th
year will be
4th
year revenue = (2,789,640*1.10) = Tk. 3,068,604 and
5th
year revenue = (3,068,604*1.10) = Tk. 3,375,464
As the rate of return in 3rd
year is 40.96%, our plan states that rate of return in the next
years will grow than 40.96%. But we assume the same rate of return for next 4th
and 5th
years. So, net income in 4th
and 5th
year will be –
Net income in 4th
year (3,068,604*0.4082) = Tk 1,252,604 and
Net income in 5th
year (3,375,464*0.4082) = Tk 1,377,864
Total Net income will be for 2 years = 2,630,468 (This income is eligible to open
similar another project)
As our initial startup capital is Tk. 1,608,300, we can say that after achieving break-even
point we can open new firms by each 2 years’ net income.


Conclusion:
Business plan is not only a plan, it is guideline which guide and indicate how business
operations will be done to generate superior value. We have designed this plan keeping
goal to contribute in national nutrition requirement, creating employment for
underprivileged people. For this reason, we adopt organic food farming strategy in which
is very new concept in our targeted market if we review our entire operational process.
We also believe and expected that this business will definitely generate high profit for
long run as rate of return on investment is 40.96% after achieving break-even point. We
have passes almost every test to check this business’s profitability and we found green
signal to invest. This concept is not only benefited us by profit, this primarily provide
benefit to its most valuable and respected customers. We also expect all kind of helps
from all stakeholders in order to make and take place this business as one of the
successful business. So, take healthy and green foods to ensure your and future
generation’s healthy sustainable life.

Business plan on an organic farm "Green view"

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Business plan on an organic farm "Green view"

Similar to Business plan on an organic farm "Green view" (20)

Recently uploaded

Recently uploaded (20)

Business plan on an organic farm "Green view"