Executive Summary

The project is a down-to-earth one; no ivory tower is there and no Dutch courage
is needed. Its all about mushroom- its cultivation and marketing where investment is
extremely possible minimum. No down time exists here, as the state of art technology is
not needed. Even its neither a capital intensive one. The project is aimed at fulfilling
with the very number one basic need i.e., fooding along with the ex gratia, nutrition,
staying at the heart at the agriculture sector, the mother of all industries. The projected
outcome is that by investing BDT 6,000,000.00 (equivalent of US$ 95,238.05), net
income would be BDT 13,249,445.00 which states about 220% ROI without any
substantial variation, due to the existence of antithesis relationship in between risk and
return (because, here risk is at rock-bottom but the return is sky-rocketing).
Quality Mavens INC, LLC (proposed) plans to produce and market mushrooms in
Bangladesh, a country with a conducive climatic condition for the cultivation of
mushrooms. In Bangladesh due to escalating population growth, land to man ratio is
decreasing every year. As a result, the land available for cultivation of vegetables is
decreasing. These circumstances create a potential market for mushrooms, a vegetable
with high nutritious value in it. The price of vegetables is skyrocketing and it is getting
beyond the reach of the common people. This inadequate consumption of vegetables has
created malnutrition in the general public. In such a situation, the cultivation of
mushrooms would not only bring profit for the company but also meet the needed
nutrition for the people of the country. Moreover, the Bangladesh Government is also
providing a tax holiday for entrepreneurs cultivating mushrooms. The government and
private banks are offering loans to encourage entrepreneurs to be engaged in mushroom
business. A few companies are producing mushrooms for export, however, for the local
market; there are an insignificant number of producers. Therefore, the main objective of
this company would be to profitably serve the people of Bangladesh, who are suffering
from malnutrition due to the inadequate consumption of vegetables.
The main challenge of the company will be to position mushrooms as a high
quality and high value-added alternative vegetable in the local market. To achieve this, a
heavy promotional campaign will be undertaken. In the first two years, this campaign
will be concentrated only in Dhaka district. The company gradually will extend to other
districts such as Chittagong, Sylhet, Rajshahi, Khulna, and Barisal. The company will
also popularize mushrooms in the rural areas through the influence of reference groups.
The owners policy of retention of earnings within the company would support this
growth strategy financially. In addition, the company would maintain a good relationship
with its current creditors; this would help the company in case of a sudden need of funds.
The location of the cultivation plant in the tree-shaded rural areas with an easy
communication system from the urban areas would help the company to produce quality
mushrooms through the proper maintenance of temperature. Besides, the companys
precautionary measures to tackle the various natural and human created barriers would
further enhance the quality and regularity of its service. In addition, the company would
maintain a close relationship with the Mushroom Development Center (MDC), at Savar,
Dhaka, to be acquainted with the recent developments in research and development of the
cultivation of mushroom at home and abroad.

Mushroom Mavens INC, LLC

2
Company Overview

The name of the company will be Mushroom Mavens INC, LLC. The
cultivation plant of the company will be located at Hayat-kar-Chala village of the Shripur
police station in Gazipur district. The company will employ 25 employees. The
management of the company will consist of one general manager (GM), one manager for
the cultivation plant office, an agriculturist at cultivation plant office, and one manager
for the sales center. The company will start with an initial investment of Tk. 6,000,000, of
which Tk. 2,000,000 will be invested by the three founding owners in equal proportion.
The rest of the initial investment will be obtained through a bank loan.
Mission Statement
To grow and to make a profit through customer satisfaction by providing top
quality mushrooms.
Vision Statement
To meet the daily vegetable needs for the people of Bangladesh.
Key Products
Different types of mushroom are available in this country such as - oyster
mushroom, milky white mushroom, straw mushroom, shitake mushroom, button
mushroom and reishi mushroom. These different types of mushroom are generally grown
in the different seasons of the year. Only the oyster mushroom is generally grown
throughout the year. The climatic and other environmental conditions of Bangladesh are
also suitable for the production of oyster mushroom. As the company plans to produce in
mass to serve the customers, it will now only focus on the production of oyster
mushrooms. This oyster mushroom will be sold fresh, as well as dried.
Strategic Goals and Objectives
Goals
Short term
To create awareness and to educate the people about the nutritious and medicinal
value of mushrooms.
Long term
To be the market leader of the vegetable industry in Bangladesh by positioning
mushrooms as a high-quality and high value-added alternative vegetable.

Mushroom Mavens INC, LLC

Objectives
The main purposes the companies are to
serve the customers with top quality mushrooms,
set-up cultivation plants throughout the country,
establish an extensive distribution channel so that mushrooms of this
company will be available throughout the country,
improve the livelihood of the rural people by employing them in the
cultivation plants.
Guiding Philosophy
Mushroom Mavens INC, LLC places the customers at the heart of its all
activities. It pledges to cater its customers with top quality mushroom, timely delivery,
and superior service.
The company asserts that employees are its internal customers and they are the
ones who are the main means in provision of quality products. Hence, it would provide
the employees with a safe and congenial working environment and above-average
industry wages.
The company believes that provision of quality products requires an earnest
involvement of the all parties in the distribution channel. Thus, it would treat the
distributors and vendors fairly and would ensure a fair return for them.
The company also believes that taking care of the natural environment would
ultimately end up helping the society as well as its business. Hence, it takes the oath to
conduct its business in a manner friendly towards the environment. Moreover, it promises
to be engaged in environment enhancing activities such as tree plantation.
Last but not the least; the company declares that it must earn a fair return on the
investment of its owners.
Industry Overview and Analysis
The commercial cultivation of mushroom was first started in Europe in the
beginning of the 20th century. Afterwards it spread to the other countries. In the ancient
Greek, Roman, and Indian cultures, mushrooms have been considered a delicacy
associated with the royal class.
Mushroom cultivation in Bangladesh is a recent development. The Government
of Bangladesh is promoting the culture of mushrooms to a large extent. Scientific
mushroom production in Bangladesh started in the late 1970s by volunteers from Japan
named Overseas Co-operative Volunteers. In the early 1980s, commercial mushroom

Mushroom Mavens INC, LLC

cultivation was initiated by the Bangladesh Agricultural Research Council when a

Mushroom Development Centre (MDC) was established at Savar, Dhaka. The
commercial production of spawn packets of oyster mushroom started in 1989. Over time,
production increased from one metric ton (MT) in 1989/90 to five MT in 1991/92. Today,
there are three mushroom culture centers in the country. The first one was established in
MDC at Savar. The other two are situated in Mymensingh and Dinajpur. These culture
centers mainly train people on mushroom cultivation and also provide mushroom
growing bags containing "mycelium" (growing media) inoculated with mushroom spawn.
The cultivators need to germinate the spawns and later harvest the mushrooms.
There is an active interest among local industrialists to commercially produce
mushrooms with a view to processing mushrooms for export. Mushrooms generally are
not considered as a part of the regular diet in this country. Currently, mushrooms
produced on farms are locally marketed. Mushrooms are supplied to hotels, Chinese
restaurants, and markets in close vicinity to the residence of foreigners. One agroprocessing company also exports mushrooms to European markets. Besides, only a few
individuals cultivate mushrooms upon receiving training on mushroom cultivation.
However, most of them cultivate mushrooms as a hobby, rather than a business.

Market Overview and Analysis

More than 30% of the people of Bangladesh live below the international poverty
line. While agriculture remains the main source of income for around 80% of the people,
the countrys per capita arable land stands at 0.12 hectares. Therefore, there is limited
land available for the cultivation of vegetables. Moreover, a population growth rate of
1.7% per annum is also reducing per capita land holding of the country. It is obvious that
with the increasing population, the countrys cultivable land area cannot meet up with the
demand for vegetables. The price of vegetables is also very high. Thus, there is a big gap
in between the supply of and demand for vegetables, which can be profitably met by
introduction of mushrooms.
Potential Customers
The company will cater to both business and individual customers.
Business customers
All hotels and Chinese restaurants of the country are the potential business
customers for mushrooms. These customers will be the bulk buyers for this product. This
segment is very important to make a profit for this company. Therefore, the company will
maintain good relations with these customers through instant delivery to ensure their
retention.

Mushroom Mavens INC, LLC

Individual customers
Individual buyers would be the other customer segment for this company.
Attention will be given to the homemakers of the urban areas who are very concerned
about the health condition of their family members. The economic status of this segment
would comprise the middle or upper middle class. The following Table 1 displays the
variables that will characterize the consumer market of the company.
Table 1
The segmentation variables of the consumer market of mushroom
Variable

Condition

Gender
Family life
Occupation
Social Class

Female
Married with children
Professional, Homemakers
Middle class, upper middle
class

Household Income
(monthly)

BDT.10,000 and above

Size and Growth of Market

According to Bangladesh Bureau of Statistics (BBS), there are 5 million people
who belong to the household with a monthly income above Tk.10,000. The current
population growth rate is 1.7% per annum. Even if the growth rate among the target
market is 0.5% the size of the market of the company would increase to 5.025 million in
one year.
According to the Bangladesh Yellow Pages, there are 42 Chinese restaurants in
Dhaka city, 16 Chinese restaurants in Chittagong city, 2 in Rajshahi, 4 in Khulna, and 1 in
Sylhet. A close look at the list reveals that many of the existing restaurants have not been
documented here. Moreover, many restaurants open up shop every year.
Competitor Analysis
There is only one company at present located at Savar which produces
mushrooms both for the domestic consumers as well as for export. Though that
companys utmost emphasis is on export, it supplies dried mushrooms to some retail
stores such as Agora, Nandan, and PQS. According to MDC, there are about 10
micropreneurs scattered in Dhaka city, who cultivate mushrooms. These cultivators, most
of whom cultivate mushroom in their homestead gardens or rooftops, have very limited
capacity and produce mushroom to sell mostly in their neighborhoods. A few of them,

Mushroom Mavens INC, LLC

however, also supply fresh mushrooms to the above-mentioned retail stores. The
company producing commercially and the individual cultivators purchase the spawn from
the MDC. The average purchase of spawn by the company at Savar is not more than 2000
bags per month. The average purchase of spawn by individual cultivators is around 20
spawn bags per week.
There has not yet been a well-established distribution channel for mushrooms.
The company at Savar and the individual cultivators supply to the retail stores based on
orders.
Operational Plan
Product Overview
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. These
higher fungi, which produce mushrooms, consist of many cells. There are different types
of mushrooms available in this country. The climatic and other environmental conditions
of Bangladesh are extremely suitable for the production of oyster mushrooms. Therefore,
the company has selected this type of mushrooms to produce in its plant.
Facilities and Plant
The company will establish a 288,000 square foot plant in Hayat-kar-Chala
village of Shripur district, which is located close to a paved road. Here, the price of land
is very low compared to other places. The labor is also cheap in this locality. The plant
includes the production plant, drying and storing house, and an office building. In
addition, the company will also locate a sales centre in Kawran Bazar, Dhaka. The
location of the plant is shown in the Figure 1.

Figure 1: Location of plant.

Mushroom Mavens INC, LLC

Production houses (Mushroom houses)

Forty four mushroom houses will be built. Each square-shaped house would have
an area of 480 square feet. Initially, 25 houses will be built. Then, over a two year period,
the total number of houses built would be increased to forty four. The walls of these
houses will be made of bamboo and the roofs will be thatched with Golpata, i.e. leaves
of the mangrove plants. Besides, the houses will have trees towering over them. Thus, the
required temperature will be maintained. Each house will have an adequate ventilation
system. It will be equipped with bamboo-made racks and each rack will have 7 shelves.
One house will be capable of accommodating 16170 spawns (each rack can house 5390
spawns). Figure 2 shows the layout of a mushroom house for the company.

21.5 ft
2 ft
2 ft.

4.5
ft

2
ft

4.5
ft

2
ft

4.5
ft

2ft
21.5 ft

2 ft

Figure 2: The layout of a mushroom house.

Drying and storehouse, office-room, and transportation

One house with an area of 1000 square feet will be built. There will be two rooms,
one to be used as the drying room, which will be equipped with electric bulbs, the other
to be used for storing packaged dried mushroom. There will be a semi-brick built office
of three rooms with a kitchen. The manager and the agriculturist will share this office. All
the records of the plant would be maintained here. In addition, the company will have one
pickup van for transporting mushrooms from the cultivation plant to its sales center in
Dhaka.
Equipment and machinery
The capital outlay is very insignificant. The company will only need a laminating
machine for packaging.
Production Process

Mushroom Mavens INC, LLC

The company will collect poly bags called spawn from MDC, Savar. Such bags
include "mycelium" (growing media) innoculated with mushroom spawn. After
placing/planting these bags on the racks of the mushroom house, harvesting can be
completed on an average of 8 days. Harvesting is done at the early stage of fruiting just
before the spreading of umbrella like fruit body. Oyster mushrooms begin to grow
through holes in the poly bag and form a cluster. Mushrooms can be harvested over three
months after plantation. After harvesting, part of the produced mushrooms will be
packaged fresh and sold immediately. The rest of the produce will be dried by the heat of
electric bulbs or sunlight. The dried mushrooms will be packaged in airtight poly bags
and stored. These would be sent later to the companys sales centre.
Research and Development
The company would maintain a close relationship with the Mushroom
Development Center (MDC), at Savar, Dhaka, to be abreast of the recent developments in
research and development of cultivation of mushroom at home and abroad. Also, the
companys own agriculturists will constantly observe its cultivation plants so as to
increase production and to ensure quality.
Quality Assurance
The production of quality mushrooms requires a high level of competence and
skill. The principal management factors that draw attention are temperature monitoring,
watering, carbon dioxide monitoring, humidity control, air movement and hygiene, pest
and disease control. The manager and labourers of the plant will be provided training on
these aspects. Moreover, an agriculturist will be employed to constantly monitor the
mushroom houses. Careful attention would be given to cleanliness and air-tightness
during the packaging of the product.

Marketing Plan
Marketing Objectives
Maintain positive, steady growth each month.
Experience an increase in new customers who are turned into long-term
customers.
Generate brand equity at the current individual consumer market as well as
within the business customers market.
Marketing Strategy

Mushroom Mavens INC, LLC

Marketing strategy entails discussion of product, target market, the planned

product positioning, and sales, market share, and profit goals for the first few years. This
plan specifically discusses these issues for the first two years.
Product
As mentioned earlier, the company would cultivate only oyster mushrooms. It will
sell these mushrooms both fresh and dried. Both fresh and dried mushrooms will be
packaged in polythene bags. The package will also display the logo of the company.
According to MDC, this type of mushrooms consists ofProtein
Vitamin & Mineral
Fat
Carbohydrate

25-35%
57-60%
04-06%
05-06%

Thus, the attributes of this mushroom and the consumer consumption benefits can be
displayed in the product laddering as follows.
Value

Oyster Mushrooms

Consumer consumption benefits

Attributes

-Builds Muscles

Protein

-Protects from diseases

-Builds bones
-Make bones strong

Vitamin &
mineral

-Produces heat & energy

- Smoothens the skin
-Produces energy to work

Fat

Carbohydrate

Figure 3: The product laddering of oyster mushrooms

Price
A cost-plus pricing strategy will be adopted to set the price of the product. As the
economy of the country is weak, the common people will not be able to purchase the
product at a high price. Besides, Mushroom Mavens INC, LLC aims to be the market
leader of this industry by establishing a higher quality product at lower price. This will
restrict the entry of new competitors and defeat foreign competitors in the market. A 50%
average unit (kg.) profit margin would be achieved by pricing fresh mushroom at Tk.120
per kg and dried mushroom at Tk.220 per kg. These quoted prices are lower than the

Mushroom Mavens INC, LLC

10

existing market prices, i.e. Tk.130-150/kg for fresh mushroom and Tk.225/kg for dried
mushrooms.

Distribution
The company will establish an extensive distribution channel for mushrooms to
make it available throughout the country. It will build six distribution centers in the six
divisions of Bangladesh: Dhaka, Chittagong, Sylhet, Rajshahi, Khulna, and Barishal.
From these distribution centers, the sales representatives will supply the mushrooms to
different retail shops (small and mega) on the basis of their demand. The small vegetable
traders will purchase mushrooms directly from the distribution centers. On the other
hand, the business customers such as hotels and Chinese restaurants will place order 15
days prior to delivery and the company will supply them directly from the cultivation
plant. The following figure shows the distribution channel of the company.

Production
plant

Distribution
centers

Business
customers

Retail shops
(small & mega)

Consumers

Local
vegetable
traders

Consumers

Figure 4: Distribution channel of mushrooms

Product Promotion
Positioning
Mushroom Mavens INC, LLC plans to position itself on the following bases:

High-quality producer
Provider of good value for money
Local producer
Reliable partner of all stakeholders

Advertising, Trade promotion, and Fairs

The retail shops selling mushrooms will be decorated with attractive posters of
mushrooms indicating the availability and containing the information about the benefits

Mushroom Mavens INC, LLC

11

of mushroom consumption. Leaflets will be distributed to the consumers through the

national daily newspapers. The leaflets will contain the consumption benefits and
cooking process of mushroom. In the first two years, such campaign would be conducted
only in Dhaka division. Afterwards, when the company moves to other divisions, similar
campaigns would be conducted there as well.
The retail shops and local vegetable traders would be provided with a trade
discount. Moreover, retail shop salespersons and vegetable traders would be handed out
T-shirts displaying the companys logo as part of the motivational technique.
The company will participate in trade fairs. The stalls will serve the visitors
several kinds of food, pickles etc made from mushrooms. Free cooking recipes, and free
mushroom sachets will also be provided as part of the sales campaign.
As the company targets the rural as well as the urban market, it will launch radio
advertisements and word-of-mouth communication will be spread with the help of
reference groups such as the imams, doctors (rural) and teachers. It will also provide free
samples to this reference group for promotion.
Customer Service
The company believes in relationship marketing. Therefore, it wants to build a
lifetime relationship with its customers. This will be achieved by paying attention to the
customer needs. Thus, the company will provide its phone numbers to the customers so
that, they can promptly inform about any of their demands or complaints.
As it is a new kind of vegetable introduced to the market, people will be very
much confused about preparing food items with mushroom. Therefore, the company will
also train and advice customers on preparing foods containing mushroom. A book of
recipes of exotic foods prepared with mushroom would be distributed in the urban areas.
Market Research
The company plans to undertake market research as a regular activity. A very
potent way of dynamic market research is a feedback mechanism based on a suggestion
card system. The company would embrace this system. It contains several statements
that customers are asked to rate in terms of a given scale. There are also several openended questions that allow the customer to freely offer constructive criticism or praise.
Customers who will be provided free sample of mushrooms will also be requested to
complete the suggestion cards and to return them one week later. Mushroom Mavens will
work hard to implement the reasonable suggestions of these customers in order to
improve its service offerings as well as to show its customers that their suggestions are
being valued.

Mushroom Mavens INC, LLC

12
SWOT Analysis

Strengths
Food value of mushrooms
Mushrooms contain Chitin, a non-soluble protein that precipitates bile in the large
intestine so that the bile is eliminated
from the body instead of being
Anti
Viral
reabsorbed, forcing the body to make
Increas
Anti
e
new bile. It does this by breaking down
tumor
libido
cholesterol, and improving cardiac
health. Traditional Chinese herbalists
Immun
Contro
e
l blood
knew of this effect for centuries. They
enhanc
pressur
always argued that eating mushrooms
er
e
cleans the arteries. For the most part,
Mushr
oom
these health benefits center on the
Cardio
effect these mushrooms can have in
Vascul
Chitin
enhancing and bolstering the immune
ar
system. Contained in the cell walls of
Diabet
Lower
many medicinal mushrooms are
es
cholest
compounds that interact with the body's
protect
erol
Kidney
ed
immune system, helping to modulate
tonic
and enhance it.
Figure 5: Medicinal Value of Mushroom

Cancer treatments that employ the

compounds extracted from medicinal mushrooms have shown tremendous effect on
survival rates and disease free rates for patients. However, it is also being investigated
that these mushroom species can be considered to be effective in alleviating the effects of
HIV/AIDS. As mushrooms have a great food value the consumers will accept it very
rapidly.
Pioneer company
There is no mushroom company which produces purely for the domestic
consumers. Therefore, Mushroom Mavens INC, LLC will be the pioneer of the market
and it will be easy for it to build a position in the mind of the consumers.
Labor-intensive
This business does not require a large amount of capital. It is mainly labor
intensive. It does not require a lot of land, equipments or machinery. A simple cropping
house, built from locally available material is adequate. Sufficient watering of the
cropping house provides the moisture level required to trigger mushroom fruiting.

Mushroom Mavens INC, LLC

13

Government facilities
The Government of Bangladesh is encouraging the business people to invest in
agro-business. It is also providing different types of loan facilities for these types of
programs. Therefore, it will be easy for the company to obtain loans and thus to expand
the business.
Weaknesses
Image of the product
In the local market many people believe that mushrooms are a poisonous thing
and that it is not edible. This image of the core product is a major weakness of the
company.
Consumer illiteracy
As it is a new product and consumers have a negative image about mushrooms, it
will require educating the consumers about the benefits of mushrooms.
Price
As high costs are involved in the production process of mushrooms, the price of
this product is much higher than of general vegetables. Therefore, it will not be possible
for the company to serve the lower income groups in the beginning stage.
Opportunities
Expand the product line
At the very beginning the company will just produce oyster mushrooms but it will
have the opportunity to produce other types of mushrooms in different seasons. It will
also be possible to grow the other types of mushrooms by creating an artificial
environment using technology.
Expand the market
If the company can educate the rural consumers through a heavy promotional
campaign, it will be able to expand its market to a large extent. The company also has the
potential opportunity to export mushrooms to other countries.

Mushroom Mavens INC, LLC

14

The production of spawn

In initial few years the company will be dependent on the government agency for
spawn. But in three to four years, when it has accumulated earnings, it can buy the
technology for production of spawn itself. Besides, as raw materials for production of
spawn such as sawdust, grass straw, maize cobs, wheat/maize bran etc., are cheap, the
variable cost of producing spawns will not be high.
Threats
Competitors
The Government of Bangladesh is vastly encouraging the business people to
invest in agro-business and is also providing different types of loan facilities for these
businesses. Thus, it is likely that very soon the company will face extensive competition.
Government agency
In the first few years, the company will be collecting spawns from the government
operated MDCs. If the government decides to close down this project, the company will
be in trouble. In that eventuality, the company will have to procure a considerable sum on
loan to buy the technology for producing mushroom spawn.

Risk Analysis (unforeseeable barriers)

Risk analysis includes the discussion of the unforeseeable barriers the company
might face and the precautions it would have to take to overcome these barriers. The
business might face three unforeseeable barriers. First, it might be the occurrence of
natural calamities such as heavy storms during monsoons, high temperatures during
summer or low temperature during winter. Second is attack of any new diseases or pests
on mushroom spawn. Third is the possibility of a prolonged transportation strike. These
barriers would incur high costs for the company in terms of taking precautionary
measures and thus would lower its profit.
To secure against heavy storms uprooting the mushroom houses, the company
would build the mushroom houses as strong as possible. If temperatures rise above 30 0 C,
mushrooms will not come out of it spawn. Some measures such as maintaining a high
level of moisture inside the house by spraying water heavily and keeping the floor wet
would be taken to mitigate the situation. In the event of a much higher temperature, wet
sacks would be put up on the walls of the houses. On the other hand, if temperature falls
below 200C during winter, the harvest of mushrooms would also be affected.
Maintaining a foggy situation inside the house by heavy water spraying and allowing
more light to enter the houses would mitigate the problem. However, if the temperature

Mushroom Mavens INC, LLC

15

falls much lower for a period longer than 6 days, electric bulbs would be lit up inside the
houses to keep it warm. This measure would be very costly to operate.
To tackle the second barrier, the company would keep abreast of the development
of diseases or pests of mushrooms at home and abroad. If the company observes any
anomalous change in any mushroom spawn, it would immediately separate the troubled
spawn from the rest and would send it to the Mushroom Development Center at Savar,
Dhaka for investigation and report.
In the event of a prolonged transportation strike all the yield of mushrooms would
have to be dried up. Since fresh mushrooms bring more profit than dried mushrooms,
such event would lower the profit for the company.

Human Resource Strategy and Planning

The three founding owners will supervise the entire operation of the company
until a general manger (GM) is recruited and appointed. The GM will be provided
training on the cultivation of mushrooms, and the accounting systems of the company.
The GM would be responsible for supervising cultivation and sales activities. S/he would
also be responsible for executing promotional campaigns to achieve target sales. S/he
must be a business graduate with previous experience in managing business in a similar
capacity.
The company will also recruit a manager, an agriculturist, fourteen labourers, two
security guards, and a cook for its cultivation plant. The manager will supervise the
activities of the entire plant. S/he will also hold the whole husbandry. Thus s/he must be
at least a business graduate with a few years of previous experience of supervising, and
keeping accounts. S/he must also be a computer literate with skills in using MS-word,
spreadsheets, and accounting software. The manager would be provided with training on
the cultivation of mushrooms, and the accounting systems of the company. The
agriculturist will work under the manager. S/he will serve as an operations and quality
control manager of the plant. S/he will also conduct R&D activities to increase the
production and to ensure the quality of the mushrooms. Moreover, s/he will train and
supervise the labors in taking care of mushroom spawn, harvesting and packaging
mushroom. In case no competent agriculturist can be recruited, the Thana Agriculture
Officer will be engaged on a part time basis for the job. Fourteen labourers will work in
two shifts: seven in the first shift (8:00 am to 4:00 pm) and the rest seven in the second
shift (10:00 am to 6:00 pm). The labourers will have at least primary schooling so that
they can understand directions. These two shifts will ensure that mushroom spawn get
proper watering early in the morning as well as late in the evenings. One of the security
guards will work from 6:00 am to 6:00 pm and the other will work from 6:00 pm to 6:00
am. The job of the security guards would be to protect the mushroom houses from
animals and humans. The guards must also have at least a primary education. The cook
will serve tea and biscuits once a day to the plant staff. S/he will also cook for the
manager and agriculturist, at least one of whom would reside in the plant office.

Mushroom Mavens INC, LLC

16

In the sales center, one manager, one accounts officer, and one sales representative
will be employed. A driver will be recruited for the pick-up. The manager of sales center
would supervise sales activities. S/he would establish contacts with the restaurants and
retail stores to sell mushrooms and execute promotional campaigns. S/he must be a
business graduate with previous experience in selling. The accounts officer must be a
business graduate in accounting with skills in utilizing MS-word, spreadsheets, and an
accounting software. S/he will be given training on the accounting system of the
company. The sales representative will procure orders, deliver mushrooms, and assist in
executing promotional activities. S/he must also be a business graduate as well.
The company would provide attractive salaries. Besides basic salaries, it would
provide two festival bonuses to all the employees: each equivalent of one months basic
salary. In addition, the basic salary would increment 10% each year along with a 5%
dearness allowance. The company will be an equal opportunity employer. The owners
would continually measure the job satisfaction of the employees in order to take steps to
increase the employees work effort and commitment.

Financial Management Planning

The business would require an initial investment outlay of Tk.6,000,000
(equivalent of US$ 95,238.05). The three founding owners will provide Tk.2,000,000,
each member contributing one-third of the amount. The rest Tk.4,000,000 would be
borrowed from Small and Medium Enterprise (SME) division of Prime Bank Ltd. at an
annual interest rate of 13%. The loan to be borrowed on January 1, 2005, would be repaid
in 10 years through 120 monthly installments.
Though the potential consumer base is very large, the company will not start with
cultivation capacity to fully meet all demand. 23 houses, 25 houses, 30 houses, and 35
houses will be intensively used for cultivation in the first three, second three, third three,
and four three months of the first year respectively. The raw materials used in
cultivation/production are mushroom spawn and polythene. Mushroom spawn will be
purchased on credit every three months. The next months polythene requirement will be
purchased on the 25th of the current month. Payables deferral periods of spawn and
polythene are 20 days and 10 days respectively. Current months salary will be paid on
the 5th of the following month. Fifty percent of the mushrooms produced in the first year
will be sold fresh and the rest will be sold after drying. The effects of promotional
campaign in the first year would be to increase sales of fresh mushrooms in the second
year. The first three months of the second year will observe a 10% increase in sales of
fresh mushrooms from the sales of the last three months of the first year. The sales of
fresh mushrooms would increase by 10% in the second year in three-month intervals.
After meeting the demand of fresh mushrooms, the rest of the yield of the second year
would be dried.

Mushroom Mavens INC, LLC

17

One percent of the revenue from both fresh and dried mushrooms will be
expended to provide trade discounts and free samples. Fresh mushrooms will be sold out
immediately after its production while 12% of the produce of dried mushrooms will be in
inventory. Twenty percent of the fresh mushroom will be sold on credit with an average
collection period of receivables of 8 days. The dried mushroom will be sold 100% on
credit with an average receivables collection period of 10 days. The advertisement
expenses for year one and year two is expected to be 5% of the net revenue of the
respective years.
The profit of the first and the second year will be completely retained in the
company, i.e. there would be no dividend paid to the owners. In the end of the first year,
an amount of Tk.15,000,000 will be invested in FDR and ICB investment portfolio. The
average annual interest yield from such a portfolio is expected to be 10%. In the end of
the second year, an amount of Tk.17,000,000, which includes interest income of the
second year from the portfolio, would be reinvested in the same portfolio. The investment
in government securities would help the company enjoy a tax holiday. In the third year,
the company plans to establish sales centers in Chittagong and Sylhet. The retained
earnings would provide sufficient funds for this purpose. The company would not be
forced to borrow. However, the company would maintain a good relationship with the
current loan providing banks through regular repayments. This relationship would help
the company out, in case of a sudden need for external funds. (See appendices 1A, 1B, 2,
3, 4A, 4B, 5A, 5B, 5C).