Vocational Training Center For Employment Generation(VTCEG) Agribusiness Products

(Term Paper Of Entrepreneurship & Business Plan.) Submitted as a partial requirements of MBA IIIst semester

Submitted by:MBA IIIst semester Section: 1811 Roll No: 06-07-08-09-10

Submitted to:Mr. Lokesh Jasrai Lecturer: - Entrepreuireship & Business Plan. LSB. (LPU)

LOVELY PROFESSIONAL UNIVERSITY Phagwara

ACKNOWLEDGEMENT
A person always requires a guidance and help of other to achieve success in his mission. Similarly it was not possible for me to complete my project individually. I am very much thankful to all the people who have helped me to complete the project.

I am gratefully indebted to Mr. LOKESH JASRAI ,( Lecturer, Management ) my term paper guide for providing me the necessary help, editing my project and required guidelines for the completion of my project and also for the valuable time that he gave me from his busy schedule. Last but not the least I am thankful to all my friends of inspiration and information for us. I thank to god and my parents for showing their blessings.

Deepak Bhardwaj

TERM PAPER SNAPSHOT(Major Parts)

OPERATIONAL IDEA MARKETING PLAN FINANCIAL PLAN

EXICUTIVE SUMMARY

The business plan is based upon the agricultural products i.e Sauce And Pickle(Mixed) the location is Kangra (H.P). In agriculture, agribusiness is a generic term for the various businesses involved in food production, including farming and contract farming, seed supply, agrichemicals, farm machinery, wholesale and distribution, processing, marketing, and retail sales. The term has two distinctly different connotations depending on context. Within the agriculture industry, agribusiness is widely used simply as a convenient portmanteau of agriculture and business, referring to the range of activities and disciplines encompassed by modern food production. There are academic degrees in and departments of agribusiness, agribusiness trade associations, agribusiness publications, and so forth, worldwide.

WHY, named ? Vocational Training Center For Employment Generation(VTCEG)
The name indicates that firstly our business gives opportunity to the people of rural area in terms of employment, then we will give training to the people then shift them to do separately as a subsidiary of our firm that’s why the name is VTCEG, BUSINESS PLAN A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals. The business goals may be defined for for-profit or for non-profit organizations. For-profit business plans typically focus on financial goals, such as profit or creation of wealth. Nonprofit and government agency business plans tend to focus on organizational mission which is the basis for their governmental status or their non-profit, tax-exempt status, respectively— although non-profits may also focus on optimizing revenue. In non-profit organizations, creative tensions may develop in the effort to balance mission with "margin" (or revenue).

HIGHLIGHTS OF AN BUSINESS PLAN & Operational plan
An Idea- Agribusiness Products by the Brand name of (VTCEG) Location- Kangra(H.P) Total CAPITAL(estimated)- 1500000 BenefitsPERSONAL 1) Profit Max. 2) To use expertise/knowledge SOCIAL 1) Employment Generation 2) Remove Poverty 3) Favorable for customer

Target Market- Kangra (H.P). Business Type- Life Style (15-20) employees. Products – Sauce (Tomato), Pickle (Mixed). Capital- 2,50,000 ( Loan From Co-op Bank), 2,50000 Self Financed.. Demographics- /Customers- all segments because it is the need of every INDIAN household.

APPROVAL FOR GRANT? AID from Himachal Govt.for agribusiness projects (Procedure)

Application form taken from HPSIF(Himachal Pradesh state industrial forum)

Filling the enterprise description/send the information to HPSIF

Confirmation by HPSIF (Via-latter)

Visit of HPSIF (premeses)

Feasibility Audit of Bisiness(agribusiness context)

Final approval

Grant/Aid acc. To size of business

SWOT AMNALYSIS

Strength- Govt. Aid Raw-material ease(Agricultural residues in rural area) Weakness-Competition from branded products Opportunity- expansion of market Threat- Business failure coz of heavy competition  All the business- manufacturing or nonmanufacturing should include an operational plan as a part of the business plan. Following data will throw some light on the daily operation of our business, its location, equipment, Supplier, processes, flow of services to customers. Location • Amount of space: shop on rental measurement • • • • rural and urban area of himachal pradesh Power and other utilities : electricity, water facility and sewerage supply Because there our operational cost is low and profit maximizes. That’s why we have our location for our business is in rural area a himachal pardesh (dist.kangra) because here we can see our potential customers and we are having our own land there. We are having the space of 200 sq. feet We are having the location advantage that we do not have to purchase the location.

• •

Products  Pickle  Sauce tomato) Survey required: Type of pickle liked by people  Reasonable prices for each product

Competition There are so many local competitors are present in the market and some branded also. So for beat the competition, it is very important to market our product effectively with promotional efforts.

SALARY
emplyoyes 2 marketing exexutives 2 driver 3 helper workers 6 skilled 4 unskilled 6 packaging 2 supervisor

monthly

salary(rs) 5000 2500 1500 4000 2500 1500 8000

total 10000 5000 4500 24000 10000 9000 16000 78500

RAW MATERIAL
PRICE/ K.G mango carrot radish turnip cauliflower chilly others 30 15 4 6 10 10 QUINTALS 50 50 25 30 20 10

QUARTERLY
K.G 5000 5000 2500 3000 2000 1000 AMOUNT 150000 75000 10000 18000 20000 10000 70000

total

353000

TOMATO SAUCE
tomato others total 15 80 8000 120000 80000

200000

grand total

553000

Technology There is no need to have high technological equipments but there is a need of preservers for pickles, grinders for pickles. Need machinery for the pickle.

What are the BENEFITS that we are able to achieve??  PERSONAL:-profit maximization  SOCIETAL:-remove poverty  Increase level standard of bpl families  Generate employment Costing • Construction cost with full furnishing would be around 8 lacs • • • Transportation cost depending upon the situation. Cost of machinery around RS200000 Capital invested 1500000 out of which 5 lakh is from loan.

Purchase two cab 300000

MARKETING PLAN
Marketing is the process associated with promoting for sale goods or services. It is considered a "social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and values with others. It is an integrated process through which companies create value for customers and build strong customer relationships in order to capture value from customers in return.

PRODUCTS- Sauce(Tomato), Pickle (Mixed) MARKET- Rural And Urban(Main Focus) DEMOGRAPHIES/Customers- all segments because it is the need of every INDIAN household, because Indians are more passionate towards the spicy . Demographics or demographic data are the characteristics of a population as used in government, marketing or opinion research, or the demographic profiles used in such research. Note the distinction from the term "demography" (see below.) Commonly-used demographics include sex, race, age, income, disabilities, mobility (in terms of travel time to work or number of vehicles available), educational attainment, home ownership, employment status, and even location. Distributions of values within a demographic variable, and across households, are both of interest, as well as trends over time. Demographics are frequently used in economic and marketing research.It is important to distinguish between demographics and psychographics Frequency Of Purchase(Monthly)- 1 Kg. (Family having 2-5) members

COMPETETOR AnalysisPICKLE(Mixed) Aeroplane,Pachranga,PAN,KISSAN. Etc Competitor Pricing120 per Kg.(Kissan,Pan) 80-95 per Kg.(Local Vendors) SAUCE (Tomato) Kissan- 57 per ½ kg. Local Products- 45 per ½ Kg. All figures are taken from original amount of products (MRP) including all taxes and VAT OUR PRICING Type--(Competitive Pricing) For Pickle 100 Rs. Per Kg. (Mixed Only) For Sauce 55 Rs. Per ½ Kg. QUALITY MAINTAINANCE • • • • • ADVERTISEMENT Advertising is a form of communication used to influence individuals to purchase products or services or support political candidates or ideas. Frequently it communicates a message that includes the name of the product or service and how that product or service could potentially benefit the consumer. Advertising often attempts to persuade potential customers to purchase or to consume a particular brand Vinegar based Chemicals are used to preserve products from Algae. Supervisor will be there to quality Audits.

of product or service. Modern advertising developed with the rise of mass production in the late 19th and early 20th centuries. • • For Rural Market-Local Cable Networks are best. Banners in local fairs & Gatherings(Punchayats) Print advertisement in Local News-papers For general market— Banners. Hoardings, Local News Papers etc

EXPENDUTURE OF MARKETING
Advertisement(Type) Convensional Local Cable Connection Banners Regional Newspaper Knobies Expences(Rs.) 5000 150/Day 200/Banner 100/Day 2000(Including Panphlets) 50(ONES IN A WEEK) 2 Grand Total(Rs.) Estimated Amount for Marketing(Rs.) Frequency(How Many Times) 1 200 500 Total Cost(Rs.) 5000 30000 10000 500 4000 49500

50000

FINANCE MANAGEMAT/FINANCIAL PLAN

PROFIT AND LOSS ACCOUNT PARIICULAR Sales diret cost of sale other product expenses 1 YEAR 4252000 2126000 0 2 YEAR 5525000 2762500 0 3 YEAR 6452000 3226000 0 4 YEAR 7700000 3850000 0 5 YEAR 8850000 4425000 0

total cost of sale

2126000

2762500

3226000

3850000

4425000

gross margin%

50%

50%

50%

50%

50%

expenses payroll marketing expense electricity 942000 600000 180000 1036200 400000 190000 1139820 380000 200000 1253800 750000 210000 1379180 800000 220000

telephone utility deprication on cab

30000 0 30000 20000

30000 0 30000 20000

30000 0 30000 20000

30000 0 30000 20000

30000 0 30000 20000

deprication on machinery

rent raw material total operating expense profit before interest and tax EBITDA Interest expense tases incured net profit net profit/sales

120000 2212000 35344600 717540 717540 71754 89692 556094 13.08%

132000 2712000 4550200 974800 974800 9780 121850 843170 15.20%

145200 3250000 5195020 1256980 1256980 125698 157123 974159 15.09%

169720 3800000 6263520 1436480 1436480 143648 179560 1113272 14.45%

186690 4350000 7016170 1833830 1833830 183383 229228 1421219 16.05%

ANALYSIS OF NET PROFIT
The net sale for the first year is 4252000 and it has been increase every year. In the next year the sales has been increase to 5525000 and so on in the fifth year it is 88500000. The direct cost of sale is half of the sale so the gross margin is 50%. In expense we have pay salary according to skill and work done from worker. In first year the salary is 942000 and it has been increase every year with the increment 10%. The expenses on marketing in first year are 600000. The expense in first year is more as compare to second year because in first year every business requires more money for marketing to promote their product. In forth year the expenditure in forth year is more because business need to expand more and to recall the customer about the product. The expenditure of telephone is fixed 30000. The plan of 2500 per month unlimited is provided by company to business man. Deprecation on cab is fixed 3000 every year because we are applying straight line method. We are charging 10% depreciation on cab as well as in machinery which we have use for our business for pickle and sauce business. We are paying rent 10000 per month so the rent for the first year is 120000 and it has been increase 10% increase. The raw material for the business is 2212000 and it has been increase every year because the sale has been increases every year. The interest charge in every year is 10%. Tax incurred in first year is 89692 and it has been increase every year. So at the end the net profit is 556094 and it has been increase every year, in first year net profit is 13.08% and every year it has been increase except 4th year because on this year the expense has been increase.

CASH FLOW STATEMENT YEAR 1 cash flow from operating activities cash sale Sub total Cash from Operations Additional Cash Received Sales Tax New Current Borrowing New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures from Operations Cash Spending Subtotal Spent on Operations Additional Cash Spent 35344600 35344600 0 0 0 0 0 0 0 4252000 4252000 4252000

YEAR 2 5525000 5525000

YEAR 3 6452000 6452000

YEAR 4 7700000 7700000

YEAR 5 8850000 8850000

0 0 0 0 0 0 5525000

0 0 0 0 0 0 6452000

0 0 0 0 0 0 7700000

0 0 0 0 0 0 8850000

4550200 4550200 0

5195020 5195020 0

6263520 6263520 0

7016170 7016170 0

Sales Tax Principal Repayment of Current Borrowing Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow

170080 0 0 0 0 3714680 537320

221000 0 0 0 0 4771200 753800

258080 0 0 0 0 5453100 998900

308000 0 0 0 0 6571520 1128480

354000 0 0 0 0 7370170 1479830

ANALYSIS OF CASH FLOW
The net sale for the first year is 4252000 and it has been increase every year. In the next year the sales has been increase to 5525000 and so on in the fifth year it is 88500000.The expenditure from operations in first year is 3544600 it include all the expenses incurred on the business it include the expense to purchase the row material, marketing expenses and machinery which we have purchase for the business and also include all the miscellaneous expenses. We are not giving any type of dividend to the owners. So at the end the net cash flow in first year is 537320 and in second year it is increases at a fast speed it reached to 753800 and at the 5th year it is reached to 1479830.

CONCLUSION
In agriculture, agribusiness is a generic term for the various businesses involved in food production, including farming and contract farming, seed supply, agrichemicals, farm machinery, wholesale and distribution, processing, marketing, and retail sales. The term has two distinctly different connotations depending on context. Within the agriculture industry, agribusiness is widely used simply as a convenient portmanteau of agriculture and business, referring to the range of activities and disciplines encompassed by modern food production. The net sale for the first year is 4252000 and it has been increase every year. In the next year the sales has been increase to 5525000 and so on in the fifth year it is 88500000. The direct cost of sale is half of the sale so the gross margin is 50%. In expense we have pay salary according to skill and work done from worker. In first year the salary is 942000 and it has been increase every year with the increment 10%. The expenses on marketing in first year are 600000.

BIBLIOGRAPHY
BOOKs

Gupta.K.S(2007)Entrepreneurship,kalyani pub.

Web Portals Visited

www.globalguide.com/serty www.nenonline.com/html www.bizmantara.com www.questqueck.com