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TEAM -SPARK PLUG
BUSINESS PLAN FOR SOCIAL DEVELOPMENT
(IN RURAL AREAS)
SHRISTI
• Pvt ltd company
• Manufacturing sarees, shirt, mats, handicrafts from
banana fibre
• Location of plantation & manufacturing unit–
shimoga dist
(or any rural agrarian area where bananas are cultivated in plenty)

• Client – karnataka state handloom corporation,
craftsville, indiaart etc
11/14/2013

TEAM SPARK PLUG

2
SHRISTI
• Mission – to be successful social entrepreneurs by
promoting green & eco friendly products

• Vision –empowerment of rural youth by promoting
natural and sustainable products
11/14/2013

TEAM SPARK PLUG

3
SHRISTI - OBJECTIVES
a) To run a profitable business from manufacturing items
from easily available banana fiber.
b) To ensure that landless youth, women earn income
and become independent

c) To promote handicrafts, handloom sector
d) To promote the location as a hub, centre for this
unique trade
e) Ensure demand for Banana plantation owners
11/14/2013

TEAM SPARK PLUG

4
SHRISTI – IMPACT ON SOCIETY (AREA)
•

Employment to 20 labourers and 30 artisans (weavers,
artisans etc)

•

Increased income of villagers/rural population

•

Demand for banana crop goes up and hence farmers are
benefited

•

Encourages

•

People learn new skill and become dependent

•

Standard of life, education level, exposure to world goes up
11/14/2013

entrepreneurs

TEAM SPARK PLUG

among

the

rural

5
BANANA - FACTS

11/14/2013

TEAM SPARK PLUG

6
BANANA - FACTS

11/14/2013

TEAM SPARK PLUG

7
BANANA - FACTS
Banana Varieties in Karnataka
•
•
•
•
•
•

Dwarf Cavendish,
Robusta,
Rasthali,
Poovan,
Monthan,
Elakkibale
11/14/2013

TEAM SPARK PLUG

8
BANANA - FACTS
More than 100 products could be conceived if one
were to be enterprising enough, says M. M.
Mustaffa, Director, National Research Centre for
Banana (NRCB).

11/14/2013

TEAM SPARK PLUG

9
BANANA FIBRE
Banana fibre is eco friendly like jute fibre. Extracted
from banana stems, they are odourless and can be
dyed. They do not shrink, the colour doesn't fade
after a wash and they remain wrinkle-free even
without starch being used.Though the fabrics could
be made entirely of banana fibres, a mixture of 60%
cotton will give them durability.

The technology of banana fibre extraction has been
developed in South India where banana fibre
extraction units are running very successfully.
11/14/2013

TEAM SPARK PLUG

10
BANANA FIBRE
The banana fibre is being used for weaving
attractive pieces of clothes, rugs, sarees etc.

Besides, it is also being used to produce a
variety of items such as hats, photo frames,
trinket boxes, gift bags, picture frames,
hand bags, belts, baskets and sandals etc.
11/14/2013

TEAM SPARK PLUG

11
BANANA FIBRE
Out of 1 kilo of fibre, 40% is wasted when
it's turned into yarn and a further 20-30 %
when it's made into fabric.

11/14/2013

TEAM SPARK PLUG

12
BANANA FIBRE

11/14/2013

TEAM SPARK PLUG

13
BANANA FIBRE EXTRACTION

11/14/2013

TEAM SPARK PLUG

14
HOW DOES THE BUSINESS WORK
• Step 1:- Cultivate Banana plantations over entire land
• Step 2:- Buy machinery and equipments
• Step 3:- Employ 10 laborers for fiber extraction and other
plantation related work

• Step 4:- Employ 10 artisans for handicrafts, handlooms
• Step 5:- Buy fiber from plantation owners (as own plantation
takes 12 months time)
• Step 6:- Take help of experts, weavers association etc for
11/14/2013
TEAM SPARK PLUG
training artisans

15
HOW DOES THE BUSINESS WORK
• Step 7:-Start manufacture of sarees, mats & screens
in the first year as these can be manufactured
manually (hand woven) using least
machines/equipments
• Step 8:- Go to market, establish relation with clients
show product samples

• Step 9:- (After 1 Year) – Fiber extraction from own
plantation
11/14/2013

TEAM SPARK PLUG

16
HOW DOES THE BUSINESS WORK
• Step 10:- Procure additional machinery
• Step 11:- Employ additional labor for handicrafts etc
• Step 12:- Train new artisans

• Step 13:- Start manufacture of handicrafts, rugs and
apparels
• Step 14:- Expand market, appoint distributors (involve
local villagers in the process, make them agents)
11/14/2013

TEAM SPARK PLUG

17
HOW DOES THE BUSINESS WORK
• Step 14:- (After 3 years) Include more items,
varieties
• Step 15:- Go for advertising, art exhibitions,
promotions
• Step 16:- Appoint agents abroad & Start Exporting

11/14/2013

TEAM SPARK PLUG

18
How does the business work
Step 17:- Appoint professionals to run the company
Step 18:- Go for IPO
Step 19:- Stores expansion – Overseas
Step 20:- Work for development of the artisans by improving the
infrastructure in their towns and also by setting up workshops and
schools in these centres for the artisans next generation.
Step 21:- Dilute stake to set up subsidiary to encourage these artisans
to be entrepreneurs
11/14/2013

TEAM SPARK PLUG

19
FEASIBILITY
• Banana has year round availability & also affordability
• Conventional spacing at the time of plantation allows
1,200 plants to be grown in 1 acre but in the new
“triangular planting method”, as many as 1,700 plants
could be grown in 1 ACRE.

• As much as 200 kg-300 kg of fine fibre could be
extracted from the banana raised in 1 ACRE
• To buy - A kilogram of fibre is quoted between Rs.70 100.
11/14/2013

TEAM SPARK PLUG

20
FINANCIALS
ESTIMATED
ANNUAL
EXPENDITURE
(Cost of
manufacturing)

Maximum capital Required:-Rs.10 lakhs (excluding cost of land
which the promoter has inherited as ancestral property) but
including plantation expenses SPARK PLUG
11/14/2013
TEAM
21
PLANTATION EXPENSES

11/14/2013

TEAM SPARK PLUG

22
FIBRE EXTRACTION EXPENSES

11/14/2013

TEAM SPARK PLUG

23
IF DIRECTLY GOING FOR MANUFACTURING
(BY BUYING THE FIBRE)

11/14/2013

TEAM SPARK PLUG

24
TOTAL ESTIMATED CAPITAL REQUIRED

11/14/2013

TEAM SPARK PLUG

25
FEASIBILITY
• As per above data assuming 1500 (avg) plants can
be grown on 1 acre land with the least yield of 20
kg per plant with a selling price of Rs.97/kg (as sale
price of banana) will yield Rs. 29,10,000/•
• *** So it will make more sense to own a
plantation/make use of existing plantation than
depend on fibre or waste from plantation owners.
11/14/2013

TEAM SPARK PLUG

26
STATUS OF LABORERS
• Since the manufacturing unit is a smaller facility all laboures will be treated
as “workmen”
• The Labour can be broadly classified in two main categories i.e. unorganized
sector and organized sector.

• Unorganized sector includes small establishments
and employment
relationships of irregular duration and not regulated by any of the labour
laws. For e.g. Artisans, petty shopkeepers, hawkers etc.
• Organized sector is identified by specified/fixed operating conditions laid
down by various labour law.

• Workman derives certain rights and benefits from the various labour and
industrial laws in India.
• Non-workman is defined as employees carrying out managerial and
administrative work and their terms of employment is essentially derived
from the contract drawn up between the Company.
SOME RELEVANT ACTS RELATED TO WORK FORCE
WHICH WE HAVE TO ADHERE TO/COMPY WITH
• PAYMENT OF WAGES ACT 1936
• FACTORIES ACT 1948

• MINIMUM WAGES ACT 1948
• GRATUITY ACT 1972
• ESI ACT
11/14/2013

TEAM SPARK PLUG

28
FACTORIES ACT
• Employers are required to follow stringent licensing and safety measures.
• Factory is defined as a place where ‘manufacturing process’ is carried out
using 10 workers using electrical power or 20 workers without power.
• ‘Manufacturing process’ also includes petrol pumps, retail workshops,
handicraft industries etc.
• Post Bhopal tragedy (Union Carbide case) special chapter (IVA) has been
added making disclosures mandatory for hazardous processes.
• The working hours, leave , weekly days off and wages are similar to Shop
and Establishment Acts- this is discussed later herein.
• Under the Act the “occupier “ is responsible for all compliances and in the
case of an incorporated company the Director on the board of the company
must be designated for the purpose of an “occupier”. Failing which all
directors could become liable.

11/14/2013

TEAM SPARK PLUG

29
THANK YOU
11/14/2013

TEAM SPARK PLUG

30
SOCIAL SECURITY LEGISLATIONS
The Employees’ Provident Funds and Miscellaneous Provisions Act,
1952 (EPFA).
• EPFA applies to establishments and factory employing 20 or more persons.
• Employee drawing salary upto Rs.6,500/- per month has to become member of
the provident fund.
• EPFA in provident fund scheme provides wherein 12% is contributed by both
the employee and the employer with administration charge of 1.5%.
• In Pension/Superannuation fund scheme a part of the contribution to the
provident fund (8.33%) is diverted to this scheme.
• The Deposit Linked Insurance Fund Scheme is for providing Life Insurance
benefits. The employer contributes 0.5% and 0.01% towards administrative
cost of the basic wages.
………CONTD
The Payment of Gratuity Act, 1972
• It applies to factories, mine, oilfield, plantation, port , railway, Shops
and Establishments employing ten or more persons.
• Applicable to employees who have rendered continuous service for
five years.
• Employees with less than five years will be entitled in case of death or
disablement.
• Employer has to pay within 30 days from the date it becomes payable
to the employee.
• Total amount of gratuity payable shall not exceed Rs.3,50,000/- to 10
Lakhs unless there is a contract to the contrary.
• Compulsory insurance is necessary towards gratuity from Life
Insurance Corporation, unless employer exempted from the
Government.
• Gratuity is calculated at the rate of 15 days wages for every completed
year of service or a part thereof exceeding six months.
………CONTD
The Employees’ State Insurance Act, 1948
• The contribution under this Act of an employee comprises of
contribution payable by the employer and the employee.
• Presently every insured employee and his employer have to pay the
Employees State Insurance Corporation at the rate of 1.75% and
4.75% respectively of the wage of the employee.
• Under the Act, the employer is liable to pay compensation to
workmen incapacitated due to an accident arising out and in the
course of employment.

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SOCIO ECONOMIC BUSINESS PLAN

  • 1. TEAM -SPARK PLUG BUSINESS PLAN FOR SOCIAL DEVELOPMENT (IN RURAL AREAS)
  • 2. SHRISTI • Pvt ltd company • Manufacturing sarees, shirt, mats, handicrafts from banana fibre • Location of plantation & manufacturing unit– shimoga dist (or any rural agrarian area where bananas are cultivated in plenty) • Client – karnataka state handloom corporation, craftsville, indiaart etc 11/14/2013 TEAM SPARK PLUG 2
  • 3. SHRISTI • Mission – to be successful social entrepreneurs by promoting green & eco friendly products • Vision –empowerment of rural youth by promoting natural and sustainable products 11/14/2013 TEAM SPARK PLUG 3
  • 4. SHRISTI - OBJECTIVES a) To run a profitable business from manufacturing items from easily available banana fiber. b) To ensure that landless youth, women earn income and become independent c) To promote handicrafts, handloom sector d) To promote the location as a hub, centre for this unique trade e) Ensure demand for Banana plantation owners 11/14/2013 TEAM SPARK PLUG 4
  • 5. SHRISTI – IMPACT ON SOCIETY (AREA) • Employment to 20 labourers and 30 artisans (weavers, artisans etc) • Increased income of villagers/rural population • Demand for banana crop goes up and hence farmers are benefited • Encourages • People learn new skill and become dependent • Standard of life, education level, exposure to world goes up 11/14/2013 entrepreneurs TEAM SPARK PLUG among the rural 5
  • 8. BANANA - FACTS Banana Varieties in Karnataka • • • • • • Dwarf Cavendish, Robusta, Rasthali, Poovan, Monthan, Elakkibale 11/14/2013 TEAM SPARK PLUG 8
  • 9. BANANA - FACTS More than 100 products could be conceived if one were to be enterprising enough, says M. M. Mustaffa, Director, National Research Centre for Banana (NRCB). 11/14/2013 TEAM SPARK PLUG 9
  • 10. BANANA FIBRE Banana fibre is eco friendly like jute fibre. Extracted from banana stems, they are odourless and can be dyed. They do not shrink, the colour doesn't fade after a wash and they remain wrinkle-free even without starch being used.Though the fabrics could be made entirely of banana fibres, a mixture of 60% cotton will give them durability. The technology of banana fibre extraction has been developed in South India where banana fibre extraction units are running very successfully. 11/14/2013 TEAM SPARK PLUG 10
  • 11. BANANA FIBRE The banana fibre is being used for weaving attractive pieces of clothes, rugs, sarees etc. Besides, it is also being used to produce a variety of items such as hats, photo frames, trinket boxes, gift bags, picture frames, hand bags, belts, baskets and sandals etc. 11/14/2013 TEAM SPARK PLUG 11
  • 12. BANANA FIBRE Out of 1 kilo of fibre, 40% is wasted when it's turned into yarn and a further 20-30 % when it's made into fabric. 11/14/2013 TEAM SPARK PLUG 12
  • 15. HOW DOES THE BUSINESS WORK • Step 1:- Cultivate Banana plantations over entire land • Step 2:- Buy machinery and equipments • Step 3:- Employ 10 laborers for fiber extraction and other plantation related work • Step 4:- Employ 10 artisans for handicrafts, handlooms • Step 5:- Buy fiber from plantation owners (as own plantation takes 12 months time) • Step 6:- Take help of experts, weavers association etc for 11/14/2013 TEAM SPARK PLUG training artisans 15
  • 16. HOW DOES THE BUSINESS WORK • Step 7:-Start manufacture of sarees, mats & screens in the first year as these can be manufactured manually (hand woven) using least machines/equipments • Step 8:- Go to market, establish relation with clients show product samples • Step 9:- (After 1 Year) – Fiber extraction from own plantation 11/14/2013 TEAM SPARK PLUG 16
  • 17. HOW DOES THE BUSINESS WORK • Step 10:- Procure additional machinery • Step 11:- Employ additional labor for handicrafts etc • Step 12:- Train new artisans • Step 13:- Start manufacture of handicrafts, rugs and apparels • Step 14:- Expand market, appoint distributors (involve local villagers in the process, make them agents) 11/14/2013 TEAM SPARK PLUG 17
  • 18. HOW DOES THE BUSINESS WORK • Step 14:- (After 3 years) Include more items, varieties • Step 15:- Go for advertising, art exhibitions, promotions • Step 16:- Appoint agents abroad & Start Exporting 11/14/2013 TEAM SPARK PLUG 18
  • 19. How does the business work Step 17:- Appoint professionals to run the company Step 18:- Go for IPO Step 19:- Stores expansion – Overseas Step 20:- Work for development of the artisans by improving the infrastructure in their towns and also by setting up workshops and schools in these centres for the artisans next generation. Step 21:- Dilute stake to set up subsidiary to encourage these artisans to be entrepreneurs 11/14/2013 TEAM SPARK PLUG 19
  • 20. FEASIBILITY • Banana has year round availability & also affordability • Conventional spacing at the time of plantation allows 1,200 plants to be grown in 1 acre but in the new “triangular planting method”, as many as 1,700 plants could be grown in 1 ACRE. • As much as 200 kg-300 kg of fine fibre could be extracted from the banana raised in 1 ACRE • To buy - A kilogram of fibre is quoted between Rs.70 100. 11/14/2013 TEAM SPARK PLUG 20
  • 21. FINANCIALS ESTIMATED ANNUAL EXPENDITURE (Cost of manufacturing) Maximum capital Required:-Rs.10 lakhs (excluding cost of land which the promoter has inherited as ancestral property) but including plantation expenses SPARK PLUG 11/14/2013 TEAM 21
  • 24. IF DIRECTLY GOING FOR MANUFACTURING (BY BUYING THE FIBRE) 11/14/2013 TEAM SPARK PLUG 24
  • 25. TOTAL ESTIMATED CAPITAL REQUIRED 11/14/2013 TEAM SPARK PLUG 25
  • 26. FEASIBILITY • As per above data assuming 1500 (avg) plants can be grown on 1 acre land with the least yield of 20 kg per plant with a selling price of Rs.97/kg (as sale price of banana) will yield Rs. 29,10,000/• • *** So it will make more sense to own a plantation/make use of existing plantation than depend on fibre or waste from plantation owners. 11/14/2013 TEAM SPARK PLUG 26
  • 27. STATUS OF LABORERS • Since the manufacturing unit is a smaller facility all laboures will be treated as “workmen” • The Labour can be broadly classified in two main categories i.e. unorganized sector and organized sector. • Unorganized sector includes small establishments and employment relationships of irregular duration and not regulated by any of the labour laws. For e.g. Artisans, petty shopkeepers, hawkers etc. • Organized sector is identified by specified/fixed operating conditions laid down by various labour law. • Workman derives certain rights and benefits from the various labour and industrial laws in India. • Non-workman is defined as employees carrying out managerial and administrative work and their terms of employment is essentially derived from the contract drawn up between the Company.
  • 28. SOME RELEVANT ACTS RELATED TO WORK FORCE WHICH WE HAVE TO ADHERE TO/COMPY WITH • PAYMENT OF WAGES ACT 1936 • FACTORIES ACT 1948 • MINIMUM WAGES ACT 1948 • GRATUITY ACT 1972 • ESI ACT 11/14/2013 TEAM SPARK PLUG 28
  • 29. FACTORIES ACT • Employers are required to follow stringent licensing and safety measures. • Factory is defined as a place where ‘manufacturing process’ is carried out using 10 workers using electrical power or 20 workers without power. • ‘Manufacturing process’ also includes petrol pumps, retail workshops, handicraft industries etc. • Post Bhopal tragedy (Union Carbide case) special chapter (IVA) has been added making disclosures mandatory for hazardous processes. • The working hours, leave , weekly days off and wages are similar to Shop and Establishment Acts- this is discussed later herein. • Under the Act the “occupier “ is responsible for all compliances and in the case of an incorporated company the Director on the board of the company must be designated for the purpose of an “occupier”. Failing which all directors could become liable. 11/14/2013 TEAM SPARK PLUG 29
  • 31. SOCIAL SECURITY LEGISLATIONS The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (EPFA). • EPFA applies to establishments and factory employing 20 or more persons. • Employee drawing salary upto Rs.6,500/- per month has to become member of the provident fund. • EPFA in provident fund scheme provides wherein 12% is contributed by both the employee and the employer with administration charge of 1.5%. • In Pension/Superannuation fund scheme a part of the contribution to the provident fund (8.33%) is diverted to this scheme. • The Deposit Linked Insurance Fund Scheme is for providing Life Insurance benefits. The employer contributes 0.5% and 0.01% towards administrative cost of the basic wages.
  • 32. ………CONTD The Payment of Gratuity Act, 1972 • It applies to factories, mine, oilfield, plantation, port , railway, Shops and Establishments employing ten or more persons. • Applicable to employees who have rendered continuous service for five years. • Employees with less than five years will be entitled in case of death or disablement. • Employer has to pay within 30 days from the date it becomes payable to the employee. • Total amount of gratuity payable shall not exceed Rs.3,50,000/- to 10 Lakhs unless there is a contract to the contrary. • Compulsory insurance is necessary towards gratuity from Life Insurance Corporation, unless employer exempted from the Government. • Gratuity is calculated at the rate of 15 days wages for every completed year of service or a part thereof exceeding six months.
  • 33. ………CONTD The Employees’ State Insurance Act, 1948 • The contribution under this Act of an employee comprises of contribution payable by the employer and the employee. • Presently every insured employee and his employer have to pay the Employees State Insurance Corporation at the rate of 1.75% and 4.75% respectively of the wage of the employee. • Under the Act, the employer is liable to pay compensation to workmen incapacitated due to an accident arising out and in the course of employment.