Business Proposal

2. Kalawad Road, Rajkot.

3. Kamla Bagh Porbandar.

4. M.G. Road, Jamnagar.

6. Eagle Farm, Talala.

7. Patel Farm, Vanthli.

8. Gir Farming, Gir.

11. Eagle Farm, Talala.

12. Patel Farm, Vanthli.

13. Gir Farming, Gir.

15. Pamphlets

16. Wall Painting

17. BannerCosting Stratagem<br />Kesar MangoRs. 60 per k.g.Haphus MangoRs. 45 per k.g.Rajapuri MangoRs. 30 per k.g.<br />1642745214630<br />619760334010<br />Sales Approach:-<br />Prediction:<br />As a start up organization, sales will increase in a slow but steady fashion. FFF has adopted a conservative sales forecast to increase the likelihood of reaching the goals. Please review the following table which provides detailed sales information by month for the first year and yearly forecasts for the following two years. <br />Sales Strategy:<br />The company's average sales cycle from first contact to closing of the sale is approximately 3 to 12 days for vegetable products. Farmers Group plans to shorten this cycle. Furthermore, the company estimates that from first contact to sale conclusion, the cycle for fresh strawberries will run 3 days or less. Composted products sale cycle should run from 3 to 12 days.<br />Direct sales contacts of vegetable markets by delivery personnel, as well as cold calling by telephone of potential market outlets, will also be employed.<br />Sales Forecast:-<br />The following table and charts show our projected sales.<br />Year 1Year 2Year 3Year 4Year 5Sales5,75,000 7,00,000 8,50,000 8,89,100 9,27,331 Total Sales5,75,000 7,00,000 8,50,000 8,89,100 9,27,331 <br />1484630290830<br />32385130175<br />Internet Plan Synopsis:<br />FFF has identified a programmer (after reviewing their portfolio) who has the time, Farming skills, and artistic vision to create FFF site. The site will take four to six weeks to complete and then require bi-monthly updates.<br />Internet Promotional Strategy<br />FFF will create a website to distribute product information. This will be an efficient source of disbursement since once the site is complete, maintenance costs are low and the site can serve a large number of potential users. The site also will be a source of technical information for current owners units.<br />1637179-933301<br />-344170350520<br />Administrative Summary:-<br />Managerial Composition:-<br />Farmers Group's management team is led by Renuka Priyanka, Business Manager, and the current manager of Kesar Farm, who has extensive knowledge of the industry and has been tracking vegetable trends for 30 years.<br />The company's management philosophy is based on responsibility and mutual respect. Farmers Group has an environment and structure that encourages productivity and respect for customers and fellow employees.<br />Contract Personnel<br />They will be utilized initially for the moving and setting up of the vegetable farm, greenhouses, and the building of the manure composting facility.<br />Executive Programmer:-<br />Overall, Farmers Group will have 12 personnel. The company expects to employ 5 temporary employees during the equipment re-location phase, 4 employees on a permanent basis, and 3 part-time employee. The Farmers Group team is organized into three groups:<br />Management<br />Management will be responsible for supervising and participating in the daily operations of the facility. Management consists of: <br />Priyanka Renuka, Business Manager, Full Time <br />Dixit Thakrar, Executive Director, Full Time <br />Ajay Renuka, Management Trainee, 3/4 Time <br />Mayur Thakrar, Management Trainee, 1/4 Time<br />Daily Maintenance<br />This group will consist of the following:<br />P. Mehta , Worker, 1/2 Time<br />G. Joshi, Worker, 1/2 Time<br />1457325108585<br />48958555245<br />Fiscal Strategy:-<br />Significant Hypothesis<br />Hypothesis FORMULATION:<br />Setting of Hypothesis:<br />Ho: Company is successful to maintain the relationship with the customers. i.e. 66%<br />H1: Company is failure to maintain the relationship with the customers. i.e. 34%<br />So, H0 : > H1<br />LEVEL OF SIGNIFICANCE:<br />To this survey or study conducted earlier the following results where obtained 50 samples were surveyed. So 66% respondents prefer that company is successive in maintaining the relationship with the customers. And 34% are prefer that it is not so. Their opinion says that company is failure to maintain the relationship with customers. So, test hypothesis at 5% level of significance for two tail test and it’s critical value ± 1.96.<br />-1-<br />TEST STATISTICS:<br />P = 0.66 Q=1 - P<br />=1 - 0.66<br />=0.34<br />n = no. of total respondents i.e. 50<br />1257300165100 <br /> <br />DECISION:<br />The above calculated value absolute Z G = 0.72 which is less than the critical value I 1.96. Therefore the null hypothesis is accepted. It means that FFF is a successful company to maintain the relationship with the customers.<br />Break Even Assessment:-<br />Break-even Analysis<br />The company's break-even analysis is given below.<br />Break-even AnalysisMonthly Revenue Break-even36,974 Assumptions:Average Percent Variable Cost68% Estimated Monthly Fixed Cost11,832 <br /> Estimated Profit and Loss:-<br />As the profit and loss table shows, Farmers Group expects a steady growth in profitability over the next few years.<br />104775106045<br />Profit and Loss StatementYear 1Year 2Year 3Year 4Year 5Sales5,75,000 7,00,000 8,50,000 8,89,100 9,27,331 Direct Cost of Sales3,91,000 4,78,100 5,78,850 6,01,032 6,27,803 Other10,000 10,000 10,000 10,000 10,000 Total Cost of Sales4,01,000 4,88,100 5,88,850 6,11,032 6,37,803 Gross Margin1,74,000 2,11,900 2,61,150 2,78,068 2,89,528 Gross Margin %30.26% 30.27% 30.72% 31.28% 31.22% ExpensesPayroll117,500 111,000 111,000 111,000 111,000 Sales and Marketing and Other Expenses11,400 11,100 16,550 15,300 17,550 Depreciation0 0 0 00Gas and Oil2,040 3,000 3,000 3,000 3,000 Utilities6,000 6,000 6,000 6,000 6,000 Insurance5,040 5,500 5,500 5,500 5,500 Payroll Taxes0 0 0 0 0 Other0 0 0 0 0 Total Operating Expenses141,980 136,600 142,050 140,800 143,050 Profit Before Interest and Taxes32,020 75,300 119,100 137,268 146,478 EBITDA32,020 75,300 119,100 137,268 146,478 Interest Expense54,664 47,845 39,095 32,095 26,495 Taxes Incurred0 5,491 16,668 21,035 24,996 Net Profit(22,644)21,964 63,337 84,139 94,987 Net Profit/Sales-3.94% 3.14% 7.45% 9.46% 10.24% <br />Projected Cash Flow<br />The chart and table below contain the cash flow assumptions and projections for Farmers Group during the first five years of plan implementation. Year 1 monthlies are presented in the appendix.<br />-161925124460<br />Pro Forma Cash FlowYear 1Year 2Year 3Year 4Year 5Cash Sales143,750 175,000 212,500 222,275 231,833 Cash from Receivables431,250 525,000 637,500 666,825 695,498 Subtotal Cash from Operations575,000 700,000 $850,000 889,100 927,331 New Investment Received0 0 97,000 0 0 Subtotal Cash Received575,000 700,000 947,000 889,100 927,331 ExpendituresYear 1Year 2Year 3Year 4Year 5Cash Spending117,500 111,000 111,000 111,000 111,000 Bill Payments408,920 498,803 668,927 694,140 720,435 Subtotal Spent on Operations526,420 609,803 779,927 805,140 831,435 Additional Cash SpentSales Tax, VAT, HST/GST Paid Out0 0000Principal Repayment of Current Borrowing54,000 100,000 100,000 25,000 35,000 Other Liabilities Principal Repayment0 0 0 0 0 Long-term Liabilities Principal Repayment0 25,000 25,000 50,000 50,000 Purchase Other Current Assets0 0 0 0 20,000 Purchase Long-term Assets0 0 0 0 0 Dividends0 25,000 20,000 10,000 $10,000 Subtotal Cash Spent580,420 759,803 924,927 890,140 946,435 Net Cash Flow(5,420)(59,803)22,073 (1,040)(19,104)Cash Balance239,980 180,177 202,250 201,210 182,106 <br />Pro Forma Balance SheetYear 1Year 2Year 3Year 4Year 5Cash239,980 180,177 202,250 201,210 182,106 Accounts Receivable0 0 0 0 0 Inventory55,760 24,586 29,767 31,136 32,475 Other Current Assets250,000 250,000 250,000 250,000 270,000 Total Current Assets545,740 454,763 482,017 482,346 484,581 Long-term AssetsLong-term Assets500,000 500,000 500,000 500,000 500,000 Accumulated Depreciation0 0 0 0 0 Total Long-term Assets500,000 500,000 500,000 500,000 500,000 Total Assets1,045,740 954,763 982,017 982,346 984,581 Liabilities and CapitalYear 1Year 2Year 3Year 4Year 5Current LiabilitiesAccounts Payable6,984 44,043 55,960 57,150 59,399 Current Borrowing346,000 246,000 146,000 121,000 86,000 Other Current Liabilities0 0 0 0 0 Subtotal Current Liabilities352,984 290,043 201,960 178,150 145,399 Long-term Liabilities400,000 375,000 350,000 300,000 250,000 Total Liabilities752,984 665,043 551,960 478,150 395,399 Paid-in Capital1,000,000 1,000,000 1,097,000 1,097,000 1,097,000 Retained Earnings(684,600)(732,244)(730,280)(676,943)(602,804)Earnings(22,644)21,964 63,337 84,139 94,987 Total Capital292,756 289,720 430,057 504,196 589,182 Total Liabilities and Capital1,045,740 954,763 982,017 982,346 984,581 Net Worth292,756 289,720 430,057 504,196 589,182 <br />Conclusion: <br />In the meantime, the company would like to explore the possibilities of crayfish production. The company also believes that if crayfish production is successful then it could become the number one endeavor of Farmers Group. <br />Currently there is a farming production facility with all the necessary capital equipment approximately two miles from the current farm. Purchase of this facility would allow Farmers Group to begin production and to capitalize on this higher margin product. What makes this most attractive is the two ventures have significant joint cost potential, allowing for a reduction in marginal costs for all products and creation of real economies of scale that would provide Farmers Group with a competitive advantage.<br />