A

Business Plan on

Haat at your home

Presented By: Presented To:

Kishan Tank (10F17) Dr. H. J. Jani
Prakash Kava (10F29)
Udaysinh Barad (10F37)
Viral Gondaliya (10M41)

G. H. Patel Post Graduate Institute of Business Management

Sardar Patel University, Vallabh Vidyanagar

G.H.PATEL P.G.INSTITUTE OF BUSINESS MANAGEMENT. Page 1

 PREFACE
This report contains the business plan of fruits and vegetable supply chain. This is
like a map. Starting the business without any plan is same as a journey without
map or guide. Business plan checks the reality and viability of proposed business.

We have tried to justify the project by analyzing the feasibility of business. This
project also includes the estimation of future income statements, cash flows and
break even analysis as well.

The object of this project report is to learn how to write business plan and how to
check the feasibility of proposed business

G.H.PATEL P.G.INSTITUTE OF BUSINESS MANAGEMENT. Page 2

 ACKNOWLEDGEMENT

It is really a matter of great pleasure for us to undertake & present this creative &
practical work, a project report on business development plan.

This report has been prepared by keeping in mind various aspects relating to
market condition, financial feasibility and operational feasibility as well.

We undertake this opportunity to express our sincere thanks to Prof.

(Dr.) H.J.Jani (Director, GHPIBM) who has guided us in preparing this report. We
would like to thank Dr. Swati Mehta, who has guided us at each and every step
while developing the business plan. our. Finally, we would like to thank our family
and friends for their support and encouragement.

Date:

Place: Vallabh Vidyanagar.

Kishan Tank (10F17)

Prakash Kava (10F29)

Udaysinh Barad (10F36)
Viral Gondaliya (10M41)

G.H.PATEL P.G.INSTITUTE OF BUSINESS MANAGEMENT. Page 3

 INDEX

Sr.No. Particulars Page no.

1 INTRODUCTION 05
2 PERSONAL INFORMATION 07
3 PRESENT STATUS & MARKET POTENTIAL 08
4 TYPE OF UNIT & SITE SELECTION 10
5 COST OF PROJECT 13
6 MEANS OF FINANCE 13
7 PRELIMINARY EXPENSES 14
8 OPERATION PROCESS 15
9 FACILITIES REQUIRED 16
10 MANPOWER REQUIREMENT 17
11 UTILITIES 18
12 ADMINISTRATIVE EXPENSES 18
13 PROJECTED INCOME STATEMENT 21
14 PROJECTED CASH FLOWS 22
15 BREAK EVEN ANALYSIS 23
16 PROJECT IMPLEMENTATION SCHEDULE 25
17 CONCLUSION 26
18 BIBLIOGRAPHY 27

G.H.PATEL P.G.INSTITUTE OF BUSINESS MANAGEMENT. Page 4

 INTRODUCTION

India is the second largest producer of vegetables in the world (ranks next to
China) and accounts for about 15% of the world’s production of vegetables. The
current production level is over 92 million MT and the total area under vegetable
cultivation is around 6.2 million hectares which is about 3% of the total area under
cultivation in the country. In case of vegetables, potato, tomato, onion, cabbage
and cauliflower account for around 60% of the total vegetable production in the
country. Vegetables are typically grown in India in field conditions; the concept is
opposed to the cultivation of vegetables in green houses as practiced in developed
countries for high yields.

India is the second largest producer of fruits & vegetables in the world with an
annual production of around 94 million tones. It has the distinction of producing
almost all-tropical and exotic fruits and vegetables because of varied climatic
conditions. Due to the short shelf life of these crops, as much as 30-35% of fruits
and vegetables perish during harvest, storage, grading, transport, packaging and
distribution. Only 2% of these crops are processed into value-added products.
Hence, there is a need for maximum commercial utilization of fruits and vegetables
and to adapt production and marketing activities to the requirements of the world
market and to cater to domestic demand which, over the past few years, has been
increasing because of various socio-economic factors.

Our proposed business is to channelize the fruits and vegetables from the market to
direct customers through home delivery with freshness and good quality.

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Company Summary:

Fresh Mart will be a company which provides fresh fruits and vegetables to the
customers at reasonable price and at their convenience. The company will be
aiming for customer satisfaction and retention rather than on expansion and huge
growth. The company will be delivering fruits and vegetables at the door of the
customer. Customers in the western part of ahmedabad city do not have access to
the informal vegetable markets and so, they have to purchase their required
produces from the malls and super markets which sell these fruits and vegetables at
higher margins. The customer also do not mind to pay the extra price for the
quality produce which these retail formats provide. You will find it while standing
in the queue at reliance fresh or big bazaar that people are purchasing their fruits
and vegetables for the whole week or for three to four days and are paying bills of
more than Rs. 500 for their fruits and vegetable requirements. In this scenario,
fresh mart will provide relief to the customers from going and standing in the long
queues for their requirements. The convenience and quality produce will ensure the
customers satisfaction and will be the seed for the company development and
growth.

Mission:

To become a market leader in fruits and vegetables market in Ahmedabad city

within 5 years.

Objective:

1. To provide qualitative fruits and vegetables to consumers at reasonable price.

2. To benefit from eliminating the limitations of existing traditional supply chain.

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 PERSONAL INFORMATION
Name: Prakash Kava

Telephone no.: 7567028716

Date of Birth: 12/02/1990

Educational Qualification: MBA(Finance)

Name: Kishan Tank

Telephone no.: 7567515651

Date of Birth: 05/06/1990

Educational Qualification: MBA(Finance)

Name: Uday Barad

Telephone no.: 9274756208

Date of Birth: 31/12/1989

Educational Qualification: MBA(Finance)

Name: Viral Gondaliya

Telephone no.: 9624586241

Date of Birth: 26/07/1989

Educational Qualification: MBA(Marketing)

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 PRESENT STATUS AND MARKET POTENTIAL:

Basic market Information:

Currently the majority of the fruits and vegetables market is unorganized.

Organized retailers are also there in Ahmadabad city but they would not be
forming more than 10% of the total market. Ahmadabad city have wholesale sabji
market at Kalupur and APMC at Saraspur. Customers of the city expect the quality
products at reasonable price.

Existing Fruits and vegetables retailers in the area:

There are major organized players in this area such as Big Bazaar near ISKON
temple, Star Bazaar at Shiv Ranjani cross road and Reliance Fresh having 3 stores
in the area. They pose a strong competition base for the company. Their sales data
during last year are as follow:

Expected Customers and Selected Areas:

The customers will be those people who want to spend the quality time with their
families and expect quality fruits and vegetables at their convenience.

The company is going to serve the major four areas of the Ahmedabad city –
Prahalad Nagar, Satellite Area, Bodakdev Area and Thaltej Area. Combined these
areas include around 125000 households. The company is aiming to get 1000
customers initially.

Annual Market Need:

The annual consumption of fruits and vegetables in the Ahmadabad city can be
estimated at around Rs. 2000 crores annually.

Scope for Diversification:

Fresh Mart has huge scope for diversification in various other products like FMCG
and Grains. The company can also go for online business. Fresh Mart also has
huge opportunity for expansion the market base as it will less capital expenditure.
Fresh Mart is also planning to procure the fruits and vegetables directly from the
farmers which will open the flood of opportunity for the company for trading with

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other organized retail stores, wholesale open market operations and easy expansion
for the home delivery model.

Though the company has many diversification opportunities, it will insist more on
sticking to the core business of fruits and vegetables business. The company wants
to build a strong brand for the fresh fruits and vegetables. The expansion of the
home delivery model will be the core focus for the company growth and
expansion.

Risk Factor:

1. Fresh Mart will have to strive hard to keep the delivery cost in control.
2. Procurement of the quality products and their quality maintenance while
transit will also require substantial system and efforts.
3. The price of the fruits and vegetables are very much volatile. Sudden price
increase may couch on the profit margin of the company.

Conclusion:

Though there are several competitors in the market of Ahmedabad city, Fresh Mart
will be able to achieve success through its core focus on the product quality and
high level of on time commitment.

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 TYPE OF UNIT & SELECTION

Name of the unit: FRESH MART – A Haat at your Home

Name of our unit will be Fresh Mart –A haat at your Home because it is the project
which helps customers to get the fresh fruits and vegetables at their home. Home
delivery system is one of our competitive edges. The system of home delivery will
not only help the customers but it will also help us to reduce the wastage and
efficient purchasing as per the order.

Products:

Primary product of the company is fruits and vegetables. It will include all the
seasonal fruits & vegetables, off season fruits & vegetables.

Address:

We will be operating in Ahmadabad, Sarkhej-Gandhinagar high way.

Type of unit:

The fresh Mart will be a partnership firm.

The fresh mart will fall under the category of Small Scale industry unit because its
turnover as well as the capital investment in fixed assets is less than Rs. three
crores.

Techno economic reasons for site selection:

Techno economic factors must be considered before selection of site because it is

the decision which is irrecoverable in nature and it is very hard to change the
location. There are many reasons for site selection. Our decision of site selection is
based on the following economic reason.

Nearness to customer base

Easy for transportation

Efficient time management

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Location of Warehouse: the warehouse will be located at Sarkhej,Ahmedabad as
the it is located on the SG Highway and near to the customer base.

Requirement of land: The basic activity of the Fresh Mart will be to acquire and
pack the fresh vegetables and fruits and deliver it. One warehouse will be taken on
rent. The goods will be purchased daily and there will be no any storage.

One warehouse of 10000 square feet will be enough for above stated activities.

Marketing feasibility

Positioning:

Whenever customers need fruits and vegetables, ‘Fresh Mart’ must come first in
their mind first. Fresh Mart will be positioned as the fresh fruits & vegetables
provider for on time delivery.

Fruits like grapes, strawberry, blackberry will be cooled at the assortment centre
and then will be delivered. Only qualitative fruits and vegetables will be packed
and poor quality fruits and vegetables will be assorted and sold in the wholesale
market if possible.

On time delivery schedule also will be strictly adhered. Drivers will be negatively
reinforced for on time delivery to the customers.

Management concentration will be more on existing customer satisfaction and

customer retention rather than on expansion.

Segmentation:

Target segment will be upper middle and upper class people living in the targeted
area. Target customers would be those housewives who do not want to move
around for purchasing fruits and vegetables.

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Customer Relation:

Existing customers would be retained by providing fresh, hygienic and good

quality fruits and vegetables; timely delivery is also highly insisted for higher
customer satisfaction. In case of non delivery of the goods; those goods will be
delivered for free on the next day. The customers will be allowed to change their
order till 10pm.

Competition:

Fresh Mart will have competition from Reliance Fresh, Big Bazaar, Star Bazaar,
More Retail Store, local fruit & vegetable stores and fruits vendors & vegetables
venders.

Competitive Advantage:

Fresh Mart will be able to deliver goods at the customer’s home. Home Delivery
Model has ensured zero cost in real estate; which will help to serve customers at
lower/reasonable price. Loyal customer base creation will help for sustainable
development/growth.

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 COST OF PROJECT
Particulars Amount in Rs.

Deposit for warehouse 300000

Warehouse development expenses 50000

Karat (300*100) 30000

Weight machine(8000*4) 32000

Fridge 70000

Auto rickshaw carrier (20000*5) 100000

Preliminary expenses 60000

Working capital 200000

Software & It 30000

Computer 25000

Telephone (1500*2) 3000

TOTAL 900000

MEANS OF FINANCE:
MEANS OF FINANCE

Particulars Amount in Rs.

Promoter's contribution ( 115000 Rs. by each) 460000

Long term loan from SIDBI 500000

TOTAL 960000

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 PRELIMINARY AND PREOPERATIVE EXPENSES:

Particulars Amount in Rs.

Legal expenses 10,000

Project report preparation 5,000

Electrification & water deposits 10,000

Inauguration expenses & other expenses 10,000

Market research 10,000

Initial advertisement expenses 15000

TOTAL 60000

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 OPERATION PROCESS:

Purchasing fruits & vegetables from

wholesale Market

Making standard sized packages of

fruits & vegetables

Packaging as per customers’ orders

Loading of the packages in Vehicles

and delivery of the goods

Taking orders for the next day

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 REQUIRED INFRASTRUCTURE AND FACILITIES
Particulars No.
Delivery Vans 5
Karats 100
Computers 1
Billing Machines 2
Warehouse 1
Chairs 10
Tables 3
Refrigerator 1

Expected Operational Capacities

Delivery Van 1000Kg
Karat 25Kg
Refrigerator storage capacity 500Kg

Expected Operational Efficiency

Average Customer Interaction time at Delivery Time (Payment 1.5 Minutes
collection)
Delivery Van Mileage 15Km/Ltr
Average customer Packaging Time 1 Minute
Average Order Taking Time (On Phone) 1 Minute

Other Assumptions
Expected Amount Per Order Rs. 100
Packaging Cost 50p/package
Transport Route of Vehicle (2 Routes for a vehicle per day) 20 Km/Route
Electricity Units consumed per day 20 Units
Average No. of customers per day 500

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 MANPOWER REQUIREMENT:
Sr. No. Particulars Nos. Salary

Monthly (in Rs.) Yearly (in Rs.)

A) Warehouse staff

Supervisor 1 10,000 120000

Packing staff cum delivery man 5 30000 360000

B) Office staff

Clerk/typist 1 3,000 36,000

Accountant 1 6,000 72,000

C) Purchase staff 3 27000 324000

D) Drivers 5 30000 360000

Total 93000 1272000

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 UTILITIES AND OVERHEAD:

AMT. IN RS.

Particulars Monthly Yearly

Rent 30000 360000

Transportation (inward carriage) 15000 180000

Electricity 3500 42000

Miscellaneous - 10000

TOTAL 592000

ADMINISTRATIVE EXPENSES:
Sr. No. Particulars Monthly Yearly

1 Stationary and printing 1,000 12,000

3 Telephone and fax 5,000 60,000

4 Legal charge 5,000 60,000

6 Travelling 9000 108000

7 Miscellaneous - 10,000

Total 250000

Note:

1. Travelling expense includes fuel expense of the person collecting orders and
taking feedbacks.

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RAW MATERIAL REQUIREMENT:

Particulars Amt. in Rs.

Fruits & Vegetables 1,05,88500

DEPRECIATION:

Particulars Amt. in Rs.

Refrigerator (@ 10% on Rs. 70,000) 7000

Karat ( @ 50%) 15000

Computers (@25%) 6250

Weight machine (@ 33.33%) 10667

TOTAL 38917

SELLING & DISTRIBUTION EXPENSES:

Particulars Monthly Yearly

Outward carriage

Delivery expenses (fuel cost) 20000 240000

Vehicle rent (5000*5) 25000 300000

Packing expenses 6000 72000

TOTAL 612000

Assumption:

1. Packaging expense will be 50 paisa per order.

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INTERST CALCULATION:
Particulars Amt. in Rs.

Interest On Term Loan from SIDBI (@ 10%) 50000

TOTAL 50000

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 PROJECTED INCOME STATEMENT
Years (in Rs)

Particulars 1 2 3 4 5

Sales revenue 18000000 36000000 72000000 144000000 288000000

Less:- expenses

Cost of goods sold 10588500 21600000 43200000 86400000 172800000

Depreciation 38917 77834 155668 311336 1122672

Repairs&
maintenance(vehicle) 20000 40000 80000 160000 320000

Salaries & wages 1272000 2544000 5088000 10176000 20352000

Administrative expenses 250000 400000 640000 1024000 1638400

Selling & distribution

expenses 612000 979200 1566720 2506752 4010803.2

Interest 50000 40000

Advertising expenses 150000 300000 600000 1200000 2400000

Warehouse expenses 592000 888000 1332000 1998000 2997000

Wastages 500000 850000 1445000 2456500 4176050

Total expenses 14073417 27719034 54107388 106232588 209816925

PBT 3926583 8280966 17892612 37767412 78183074.8

Income tax @ 30% 1177974.9 2484289.8 5367783.6 11330223.6 23454922.4

Net profit 2748608.1 5796676.2 12524828 26437188.4 54728152.4

Assumptions:

1. Company aspires to grow at 100% growth rate y-o-y.

2. Loan will be paid in the second year fully.
3. Salary and wages will be increasing at 100% y-o-y.

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 4. Administrative expenses will be increased at 60% due to increase in the span
of operation.
5. Wastages will be increasing at 70% on y-o-y basis.
6. Company will increase advertisement expenses at 100% on y-o-y basis.
7. Volume of the orders has been considered instead of the individual items.
8. Gross margin rate is considered to be the same.
9. Additional Refrigerator, karats, computers, weighing machine will be
purchased every year due to higher capacity requirements.
10. Company office will be opened in the fifth year.

PROJECTED CASH FLOW STATEMENT:

Years (in Rs)

Particulars 1 2 3 4 5

Sources

Promoters contribution 460000

Loan from SIDBI 500000

Cash flow from operating

activity 2787525 5874510 12680496 26748524 55850824

Total 3747525 5874510 12680496 26748524 55850824

Applications

Cost of project 900000

Preliminary exp. 60000

Increase in assets 157000 157000 157000 5157000

Repayment of loan 100000 400000

Increase in working capital 400000 600000 800000 1000000

Total 1060000 957000 757000 957000 6157000

Net cash flow 2687525 4917510 11923496 25791524 49693824

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 BEP CALCULATION:
Particulars AMT. IN RS. AMT. IN RS.

TOTAL REVENUE 1,80,00000

LESS:- VARIABLE COST

Cost of goods sold 10588500

Transportation 180000

Delivery expenses (fuel) 240000

Packing expenses 72000

Wastages 500000

Total 11580500

CONTRIBUTION 6419500

LESS:- FIXED COST

Administrative expenses 250000

Salaries & wages 1272000

Vehicle rent 300000

Depreciation 38917

Repairs & maintenance 20000

Electricity 42000

Interest 50000

Miscellaneous expenses 10000

Advertisement expenses 150000

Warehouse rent 360000

Total 2492917

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 Contribution margin ratio (= 1-Variable cost/ sales ) (1--.64) 0.36

BEP (IN RS.)= Break Even Sales in Rs. = [Fixed Cost / 1 –

(Variable Cost / Sales)] 2492917/0.36 6924769

Break even sales is Rs. 6924769 so we will be able to break even in 139 days
(break even sales/ daily sales)

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 PROJECT IMPLEMENTATION SCHEDULE:
PROJECT IMPLEMENTATION SHEDULE

Particulars DAYS

Product selection & completion of market survey 10

Project report preparation 5

Site selection 10

Selection of vehicle & customization 10

Warehouse development 15

Recruitment of manpower 5

Sales arrangements 3

No. Of days required to implement project 58

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 CONCLUSION

Looking at the overall business plan we can conclude that, as far as the need of the
consumer is concern, it can be satisfied with the help of this business model.
Freshness is the aspect which matters as far as the fruits and vegetables are
concerned. This model emphasizes home delivery system.

The challenge for this model will be inventory management, effective procurement
and waste reduction and cost reduction.

As far as the profitability is concerned, this project is very lucrative and attractive.

G.H.PATEL P.G.INSTITUTE OF BUSINESS MANAGEMENT. Page 26

 BIBLIOGRAPHY

Websites:

www.freshndaily.com

www.bplan.com

www.magicbricks.com

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