School of BusinessPOKHARA UNIVERSITY
PRESENTATIONBusiness Development Plan
(Graduate Seminar- 1 credit Hour)
MBA – IV Trimester23rd August 2011
BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha 1
Business Development Plan of
Tasty Mushroom UdhyogLekhnath-12, Kaski
Presented byNitesh ShresthaRoll No. 10220019
IV Trimester
BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha
2
Project Highlights
Name of Project: Tasty Mushroom Udhyog
Objective of Project: To Provide quality of tasty mushroom
Annual Capacity ( in 100%) : 30,000 Kgs.Duration of Projection: 5 yearsTotal Initial Investment : Rs. 3,500,000.
BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shresth3
Project Highlights
Fixed Assets – Rs. 2483,000.Working Capital – Rs. 1017,000.Equity Financing – Rs. 2,100,000.Loan Financing – Rs. 1,400,000.
Employment generation: 10 employees.General Manager 1.Production / Service dept. 4 employees. Admin / Support dept. 5 employees.
BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha4
Project Highlights
• Rational of this project : The current market have high demand of mushroom. lack the product which dissatisfies the customer. The feasibility for inauguration of the business
inspired much. Through market analysis the availability of resources
have made my project more convenience.
BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha5
Uniqueness of this project :
Methods of production : concerned to quality.Different strategies to enter the market.Accessible of mushroom with effective supply
chain.Seeds of mushroom and cultivation.Producing mushroom in economies of scale
that would minimize the cost than competitors with better quality and taste.
6
About the Product• A mushroom is the fruit of a fungus. Its purpose is to
disperse spores, microscopic single cells that can grow into new fungi. The fungus looks like a series of branching threads infiltrating the soil or leaf litter, or in the wood of living or dead trees.
• Mushroom is an exotic and nutritious source of vegetarian food.
BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha7
Production Plan• Production process
– The company will collect poly bags called “spawn”. Such bags include "mycelium" (growing media) inoculated with mushroom spawn. After placing/planting these bags on the racks of the mushroom house, harvesting can be completed.
– Production.As per the market coverage and the requirement basis the demand and supply are analyzed. The full capacity of the plant is 30000 kg. Per year and produced and sold 60%, 70% , 75%, 80% and 80% in 1st ,2nd ,3rd 4th and 5th year respectively.
BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha8
Capacity of production & Sales
BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha 9
Year Capacity % Sales Rs.1 60 % 36,00,000.2 70 % 42,00,000.3 75 % 45,00,000.4 80 % 48,00,000.5 80 % 48,00,000.
100% 60,00,000.
Project Management Plan
Highlight t the overall structure of the project in brief• BOD• Tasty Mushroom Udhyog is the sole propertorship
company of Mr. Nitesh Shrestha. With assistance of my father Mr. Mahesh Pd Shrestha. The company may hire experts as the partner if required.
• Management level Strategic Level Operational Level
BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha10
• Working level• Working: 360 days• 10 employees. Working 8 hrs.• HR Policy• .The employee recruitment and selection, hiring and firing
will be accordance with company need and regulation. • Salary will be paid on performance, education and
experience basis. • Employee should notice 15 days earlier before resignation. • The basic salary would increment 10% each year along
with a 5% dearness allowance.
BDP Plan_ <Name of Student> 11
Structure of the organization
12
Marketing Plan
• Product Strategy – • Concerned to health and taste it can be the
substitute for non vegetarian. • It cures from blood pressure, diabetics,
cancer, heart disease etc. • The rising use of mushroom in pizza, burger, in
herbal medicine, foods prickles etc. is growing demand on mushroom.
BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha 13
Pricing Strategies
• A cost-plus pricing strategy will be adopted to set the price of the product.
• Quality Mushroom Company wants to be the market leader of this industry by establishing a higher quality product at lower price.
• Restrict the entry of new competitors and defeat competitors in the market.
• A profit margin would be achieved by pricing mushroom at Rs.200 per kg.
BDP Plan_ <Name of Student> 14
Promotion Strategies
• Advertising, Trade promotion, and Fairs• The company will participate in trade fairs and serve the
visitors several kinds of food, pickles etc made from mushrooms.
• Leaflets will be distributed to the consumers through the national daily newspapers.
• campaign would be conducted only in Pokhara division. • Convey about the consumption benefits and cooking
process of mushroom.
• Sales person will be handed out T-shirts.BDP Plan_ <Name of Student> 15
Distribution Strategies• It will build distribution centers in the different
divisions of Nepal: Pokhara, Lekhnath.
• The small vegetable traders will purchase mushrooms directly from the distribution centers.
• The business customers such as hotels and restaurants will place order prior to delivery and the company will supply them directly from the cultivation plant.
BDP Plan of Tasty Mushroom Udhyog <Nitesh Shrestha>
16
Environmental Risk AssessmentPolitical Economic Socio-
CultureGlobal Competitor
Unstable Government
Inflation Religions Geographic Low cost
Tax policy Interest rate
Veg and non veg
competition Quality
Strike-Band PCI,GDP festivals location BhorlaytarLabor unions Monetary
policyTaste n prefer.
Entry to market
Mainali chyau
Policies Fiscal policy
Values n norms.
Cost of entrance
BD BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha17
Assumption of Financial Calculations
• Variable Cost :- per unit price will be constant but depends on sales quantity, it is assumed that the variable cost will be Rs. 107 /kg.
• Salary :- Rs 864,000.• Depreciation :- 20%• Interest :-16%• Tax rate :- 25%
BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha18
Projected Sales, Cost and Profit
BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha19
Projected Income Statement
BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha 20
Capacity Utilization 100% 60% 70% 75% 80% 80%
Year of operation 1 2 3 4 5
Sales 6000 3600 4200 4500 4800 4800
VC 1764 1764 1764 1764 1764 1764
Contribution Margin 2736 1836 2436 2736 3036 3036
FC 964 2449 697 678 664 652
EBIT 1772 -613 1739 2058 2372 2384
Interest 152 217 112 87 58 24
EBT -830 1628 1971 2315 2361
Tax -207 407 493 579 590
Earning After Tax -622 1221 1478 1736 1770
Dividend 244 296 347 354
Retained Earnings 977 1182 1389 1416
Projected Cash Flow Statements
BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha21
Year 0 1 2 3 4 5
Total cash Inflow (A) 3500 1761 2362 2653 2974 2964
Total cash outflow (B) 2483 358 235 6967 441 3885
Cash Balance (A)-(B) 1017 2119 2597 4314 2593 921
Add :Opening Cash balance
- 1017 3136 5733 1419 3952
Closing Cash Balance 1017 3136 5733 1419 3952 3031
Projected Balance Sheet
BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha 22
Year 0 1 2 3 4 5
Current Assets 1017 3136 5958 5763 7555 8609Fixed Assets 2483 634 536 456 389 335Total (A) 3500 3770 6494 6219 7944 8944
Current Liabilities - 1017 2911 1624 2160 1977
Long /short Term Loan
1400 1275 1129 958 759 525
Equity Capital 2100 1478 2454 3637 5026 6442Total (B) 3500 3770 6494 6219 7944 8944
Capital Budgeting Summary In “000”s
Initial Investment : Rs. 3500.Total Present Value : Rs. 6523.01Pay Back Period : 2 YearsDiscounted Pay Back Period : 2 yrs.Net Present Value (NPV) : Rs. 3023.01Internal Rate of Return(IRR) : 34.20%Profitability Index : 1.64 times
BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha23
Financial RatiosYear 1 2 3 4 5ROI -17.78 34.88 42.23 49.60 50.59ROE -42.12 49.74 40.64 34.54 27.48ROA -16.51 18.80 23.77 21.85 19.80Profit volume ratio 51 58 60.8 63.25 63Interest Coverage Ratio
-2.83 15.59 23.71 41.047 100.03
Current Ratio 3.08 2.05 3.55 3.5 4.38Safety Margin -33.39 71.40 75.20 78.14 78.54
Cash BEP 4802 1201 1116 1049 1030BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha
24
Key to Success of the Project Capacity Utilization Number of days of operation Cost, Interest rates and inflation Lastly, it is not affected by internal as well as external
environment. Can achieve competitive advantage through its various
strategies: Low cost strategy.
Differentiation strategy.
BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha25
Suggestion
• To investors• I would like to suggest that project is profitable for equity investor
and maximizes the shareholders value and wealth .• The cost with in the 2 year of operation as well as growth has
opportunity in the business.• Tasty Mushroom Udhyog is promising to provide long term benefits
in term of profitability, fixed assets and liquidity.
• To lender• As the plan is profitable and less risky the lenders are suggested to
lend with considerable cost of capital.
BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha
26
Thank you
BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha
27
Top Related